The group of about 20 junior officers and 50 men, many said to be elite unit commanders and explosives experts, demanded that President Gloria Arroyo's administration step down, accusing it of corruption and sponsoring terrorism.

Arroyo's National Security Adviser Roilo Golez and Defence Secretary Angelo Reyes dismissed the charges but said that the government was prepared to negotiate with them to end the occupation.

The soldiers said they have set up explosive booby traps around the upmarket Ayala Center shopping mall covering apartment blocks and shopping complexes in Manila's Makati financial district.

One of the leaders of the group, identified as Navy Lieutenant Senior Grade Antonio Trillanes, said: "We mean no harm to anyone," adding that "we are putting these (bombs) to defend ourselves."

"They are putting a death warrant on us," he said, adding, "they want to suppress what we know."

Eyewitnesses and reports said the soldiers opened fire on a truck after it ignored a roadblock around an area they had occupied.

In a statement issued to news agencies, the military mutineers identified themselves as "the Magdalo group," a name similar to one used by a band of Filipino revolutionaries who fought Spanish colonial rule in the 19th century.

Arroyo had on Saturday accused the group of attempting a coup against her administration and ordered their arrest.

Trillanes was among 10 of the officers who were identified as being part of the plot.

The rogue military men, standing in a row against a red flag with a white sun symbol, made their accusations in a video statement aired on ABS-CBN television.

They wanted the government disbanded and called for what they called a "national recovery programme," without giving details.

They accused the government of selling ammunition and weapons to the Muslim separatist Moro Islamic Liberation Front (MILF) rebels, the Abu Sayyaf kidnap-for-ransom group and the communist New People's Army (NPA) insurgents.

They also said the government was behind a series of deadly bombings in the southern city of Davao in March and April that claimed dozens of lives.

The group also accused Arroyo of planning to declare martial law in August, by using a series of bombings in the capital as the pretext to stay in power after her term ends in 2004.

Arroyo, who came to power in a military-led popular uprising in January 2001, said on national television Saturday that the rogue forces wanted to seize power but insisted her government was in "full control" of the situation.

Security was beefed up at the presidential palace with armed guards ringing the perimeter of the compound. Other key installations, including the military and police headquarters and Congress building, have been secured.

The Philippines suffered seven bloody coup attempts by rightist military officers with ties to opposition politicians in the late 1980s, setting back economic development by years.

Military chief of staff General Narciso Abaya said Saturday he "fully supported" Arroyo, who had warned that the mutineers would be punished with the "maximum" penalty.

The renegade officers, graduates of the elite Philippine Military Academy aged up to 32, were backed by "between 40-50" fully armed men, top military officers said.

Rumours that a military clique was plotting to overthrow the government had gripped Manila but Arroyo dismissed them last week when she met with a group of disaffected junior officers at a dinner at the palace.

Junior military officers have complained of low pay, corruption and inadequate housing facilities for soldiers.

Trillanes said his men would evacuate people in the area but there was no sign that people were being moved from a nearby hotel or condominium, where foreigners are believed staying.

"This government is pushing us to do this," Trillanes yelled.

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