Serious initiative needed for the South : ICG

In spite of the drop in violent attacks, ICG said the insurgents are from being defeated, and the so-called advances come at a price.

ICG pointed to the "sweeping operations" kicked off in June 2007 involved the "indiscriminate detention of thousands of suspected insurgents and sympathisers, and there are credible reports of torture of detainees."

The report pointed to the beating death of a Narathiwat imam, Yapa Kaseng, 56, killed at the hands of military officials while in custody. There has been little progress on holding security personnel accountable for notorious past abuses, the report said.

ICG said the fact that the insurgents lacked a declared leadership or platform is "a major obstacle in the search for a negotiated settlement."

"Nonetheless, there is much that the government could do unilaterally to address Malay grievances in the realms of education, justice, language, history and economy.

"But this requires a rethinking on the part of the predominantly-Buddhist state, which needs to recognise the distinct ethnic identity of Malay Muslims and find ways of allowing them to be Thai citizens without having to compromise their cultural differences," ICG said.

ICG said the on-going violence is still driven by historical grievances of local Malays but warned about the possibility of the conflict attracting Islamic radicals from abroad. The report pointed to the arrest of two Malaysian citizens in Narathiwat on June 28, 2008.

One of the arrested said they had come to "help our Muslim brothers fight Siamese soldiers" and had hoped to ambush a military patrol.

"He had wished to wage jihad and had chosen Thailand as it was the closest destination. However, he said, they had not succeeded in establishing contact with the insurgents," ICG said.

The report said the political crisis in Bangkok has makes it unlikely that the government will be able to turn its attention to the Deep South any time soon.

"The longer this is put off, the harder it will become to contain, let alone resolve the conflict," ICG said.