ZAMBOANGA CITY, Philippines (AP) _ Moslem rebels Tuesday released an American and his Filipino wife 17 days after kidnapping them on the southern island of Mindanao, military officials said.

David Blair Stiffler, a construction worker from New York City, and his wife, Elpidia, were turned over to military and police units on the shore of Lake Lanao, 520 miles southeast of Manila, according to Col. Carlos Pena, provincial commander of Lanao del Sur province on Mindanao Island.

The colonel said no ransom was paid.

The couple were freed after the military issued an ultimatum Monday that the kidnappers release the hostages by Tuesday or troops would launch rescue operations.

Lt. Col. Anthony Elias, a U.S. military spokesman, said the kidnappers demanded a ransom of $7,500, which they later lowered to $1,000. He confirmed no ransom was paid.

Stiffler and his wife were driving a jeep near Lake Lanao, where they were vacationing with friends, when they were abducted July 30 by insurgents of the Moro Islamic Liberation Front. The group has been fighting since 1972 for Moslem rule on Mindanao and other southern islands.

The couple appeared in good health but were exhausted, Pena said, adding that they were taken to a military camp in the Mindanao city of Iligan before departing for Manila.