Colombia's largest rebel group has rejected a government offer to discuss a prisoner exchange.

The Revolutionary Armed Forces of Colombia said that because of "military reasons" they could not meet in the district offered by the government.

The left-wing group says it will only hold talks if military forces pull out of two western municipalities - a demand rejected by the authorities.

The Farc holds 60 hostages who could be exchanged for imprisoned rebels.

The hostages include former Colombian presidential candidate Ingrid Betancourt and three US intelligence operatives.

Last week, President Alvaro Uribe said he was willing to discuss the prisoner exchange with the Farc, following a proposal from relatives of the hostages, but he ruled out any demilitarisation.

Mr Uribe was originally elected on the back of a hardline pledge to make the rebels come to the peace table on his terms.

However, a series of deadly guerrilla counter-offensives in recent months have scotched claims by the military that the Farc is a dwindling force.

As a result, correspondents say, there is a growing feeling among Colombians that the door to negotiations needs to be opened again.