U.S. Officials Investigate Philippine Abduction of California Man

The extremist group is still holding 18 other hostages on southern Jolo island after releasing six Westerners earlier this week for a reported $6 million bankrolled by Libya.

The U.S. Embassy officials said the American government would make no deal with the rebels: "We will not pay ransom, change policies, release prisoners, or make any concessions that reward hostage-taking."

Abu Sayyaf accuse Schilling of being a CIA agent because he had introduced himself as a Muslim convert but knew little about Islam. U.S. Consul General John Caulfield called the allegation "ridiculous."

"This individual is a completely innocent person who has been unjustifiably seized," he said. "We want to see his immediate release and we look to the Philippine government to do everything possible to secure that."

Manager of radio station RMN, Ray Bayoging, said the rebels were ready to negotiate with any representative of the American government.

The faction holding Schilling insisted the prospect of more ransom was not behind the latest kidnapping. In past abductions, it has demanded the release of Muslim militants jailed in the United States for the World Trade Center bombing and other planned attacks.