Philippine President Rodrigo Duterte has announced a unilateral ceasefire with communist fighters, saying it is his "dream" to end the armed struggle which has raged for decades.

In his first State of the Nation address to the Philippine congress, Duterte on Monday urged the fighters to reciprocate as he laid the groundwork for peace talks due to begin in Norway next month.

"To immediately stop violence on the ground [and] restore peace in the communities ... I am now announcing a unilateral ceasefire," he said.

"We will strive to have a permanent and lasting peace before my term ends. That is my goal, that is my dream."

The communist rebellion and government attacks have left dead around 30,000 people since the 1960s.

The communists' armed wing, the New People's Army, is believed to have fewer than 4,000 fighters today, down from a peak of 26,000 in the 1980s, according to the military.

But it retains support among the deeply poor in rural areas, and its forces regularly kill police or troops.

Duterte, who assumed the presidency on June 30 after a landslide election win, said it was time to stop the violence.

"We are going nowhere and it is getting bloodier by the day," he said.

Benigno Aquino, Duterte's predecessor, revived negotiations soon after taking office in 2010 but shelved them in 2013, accusing the fighters of being insincere about a political settlement.

The talks collapsed after Aquino's government rejected the communists' demand to release scores of their jailed comrades, whom they described as "political prisoners".

Duterte, who counts exiled rebel leader Jose Maria Sison as a friend, had said in recent weeks he was prepared to release 11 communist members to take part in the talks.

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His aides have already held preliminary discussions with Sison and other senior communist leaders, during which they agreed to resume the peace process in Norway on August 20.

The National Democratic Front of the Philippines, one of the communist leadership groups, welcomed Duterte's ceasefire declaration and announced its readiness to reciprocate.

In a statement, it indicated that it first wanted the amnesty for its detained rebels but that it expected this to happen by August 20.

Duterte describes himself as a socialist and was a student of Sison, a political science professor, at a Manila university in the 1960s.

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They retained close ties as Duterte governed the southern city of Davao, where the communist rebellion once raged, for most of the past two decades.

Sison was forced into exile after peace talks failed in 1987 and now lives in the Netherlands.

Duterte said after being elected that Sison was welcome to return home.

Duterte was swept to power in May on a wave of public anti-establishment frustration over crime and poverty, winning 16 million votes and an approval rating of 91 percent, one of the highest recorded in the Philippines.