On Monday the NPA started a seven-day truce to coincide with the talks and President Benigno Aquino’s administration has said it will do likewise.
The New People's Army (NPA), the armed wing of the Communist Party of the Philippines (CPP), launched an uprising in 1969, when dictator Ferdinand Marcos was in power.
About 4,700 NPA rebels are still fighting, earning funds through extortion from businesses and provincial politicians.
Since 1986, successive Philippine administrations have held peace talks through the CPP's Netherlands-based political arm, the NDF, one of whose demands is its removal from US and EU lists of "terrorist" organisations.
"Let it not be said that the peace talks failed because of the failure of nerves, because the failure of will, because of the failure of imagination," said Aquino adviser Teresita Quintos-Deles at the talks.
"We stand at the threshold of a new beginning," said said NDF chief negotiator
He called for an end to “the transgressions, gore and filth” of previous president Gloria Arroyo’s rule.
The government says it hopes the decades-old conflict will be over by 2014.
But the NDF has accused the army and police of trying to sabotage the talks by arresting CPP Central Committee member Alan Jasminez.
It claims that he has been working as a consultant for the peace talks for several years and thus enjoys diplomatic immunity.
"It is imperative that Jazmines be released immediately and unconditionally, so that there will be no disruption of the formal peace talks. Jazmines must be available to participate in the next round of formal peace talks," Jalandoni said in a statement.
Human rights campaigners agree that the military are trying to stop or delay the talks, according to Father Dionito Cabillas of the Karapatan organisation.
“Alan Jazmines said to us that the military informed him that he is facing 13 counts of murder ... he says that he is not aware of those crimes. He believes that it is part of the motive of the military to drum up charges against him.”
Cabillas believes the talks should go ahead “because if they do not continue, the more substantive agenda, like the economic reforms and the political reforms, will be jeopardised”.
The NPA has continued armed actions in the run-up to the talks.
On Monday it announced that it was holding a police officer as a “prisoner of war”, and last week its fighters killed five police officers in an ambush.
About 20 delegates from each side are attending the talks, which are expected to focus on economic and social reform, with the NDF demanding agrarian reform.
The government is also trying to revive peace talks with Moro Islamic Liberation Front in the south of the country.