Thailand has agreed for the first time to hold peace talks with Muslim militants in the south of the country, an apparent breakthrough towards ending a nearly decade-long conflict that has claimed more than 5,000 lives.

Senior Thai government officials signed the deal on Thursday with members of the Barisan Revolusi Nasional (BRN) in the Malaysian capital, Kuala Lumpur, where they agreed to launch a "dialogue process" in the southern border provinces. They gave no date for future meetings.

The agreement was signed ahead of a meeting later on Thursday between Thailand's prime minister, Yingluck Shinawatra, and her Malaysian counterpart, Najib Razak, after which further details would be made public, Malaysian officials said.

"God willing we'll do our best to solve the problem," said BRN's Hassan Taib after a brief signing ceremony. "We will tell our people to work together to solve the problem."

Thai authorities have blamed BRN, or the National Revolution Front, for organising a bloody Islamic insurgency that has been a daily fact of life in Thailand's three southernmost provinces since 2004.

The violence has ranged from beheadings and roadside bombings to teacher shootings in Buddhist schools, with most of the victims being civilian Buddhist Thais and Muslim Malays. It is believed security forces and teachers are singled out as they represent the Thai Buddhist government but the daily violence has prompted some locals to turn against the insurgents.

In one of the most recent clashes Thai marines killed 16 insurgents who were attacking a military base in Narathiwat province. It was the deadliest toll the insurgency had seen since more than 100 died in a single day in April 2004. The base had been tipped off by local people that the insurgents were planning an attack.

Thailand's deep south was an independent Islamic sultanate until it was annexed by Buddhist-majority Thailand in the early 20th century. Muslims living there have long complained of discrimination by the central government in Bangkok. Substantial anger towards the government flared up in October 2004 when the Thai army arrested scores of Muslim men, tied them up and piled them on top of each other in trucks, where 78 of them suffocated.

The insurgency has no clear leader and no clear goals, and for the past decade has remained a murky, decentralised uprising with various factions. Both the BRN and another militant group, the Pattani United Liberation Organisation, have called for a separate state. It is unclear whether the other groups will follow the BRN's lead in Thursday's agreement, particularly as doubts persist over the desires of the "old guard" separatists versus their younger revolutionary counterparts.

Malaysia – which has been brokering a peace deal between the Philippines government and the rebel Moro National Liberation Front – is currently acting as a facilitator in the potential Thai deal as its northern states border Thailand's south. The Thai authorities reckon fewer than 1,000 insurgents are based on the Malaysian side of the border but suspect that Malaysian officials may be harbouring separatists within their borders.