Two Muslim militants were killed Monday in clashes with government troops in the southern Philippines where the rebels were holding captive several hostages, including three Red Cross staff, dpa reported.
The two al-Qaeda-linked Abu Sayyaf rebels were killed in the first clash in Akbar town in Basilan province, 900 kilometres south of Manila, according to Lieutenant Colonel Edgard Arevala, a navy spokesman.
Arevalo said the soldiers encountered the group of Abu Sayyaf rebels while searching for kidnap victims - three teachers, a nine-year-old boy and an employee of a lending firm - held captive by the guerrillas.
Arevalo said there was no sign of the kidnap victims in the clash site. The victims were seized in separate incidents in Basilan and nearby Zamboanga City.
Fighting also erupted on nearby Jolo island, where three staff of the International Committee of the Red Cross (ICRC) - Swiss Andreas Notter, Italian Eugenio Vagni and Filipino Mary Jean Lacaba - were being held by a separate group of Abu Sayyaf rebels.
Lieutenant Colonel Fatima Rasul, a regional military spokeswoman, said there were no immediate reports of casualties in the firefight in the village of Lanao Dakula in Indanan town on Jolo island, 1,000 kilometres south of Manila.
"The Abu Sayyaf rebels are trying to get out of the cordoned area but encountered civilian volunteers and soldiers," she said.
Residents in nearby villages began fleeing their homes in fear the fighting would escalate, Rasul said.
She added the military and police have tightened checkpoints around the island to ensure that the guerrillas will not escape.
According to the separatist Moro Islamic Liberation Front (MILF), the rebels were demanding up to 10 million dollars in exchange for the freedom of ICRC staff, who were seized on January 15.
The rebel group, which had offered to help hunt down the kidnappers, said it received the information from an MILF source in the area.
In an interview with a local television station last week, Abu Sayyaf Commander Albader Parad said they seized the three ICRC staff to get the attention of the government on the plight of the country's Muslim minority.
Parad did not mention any ransom demand in the interview.
The Abu Sayyaf group has been blamed for some of the worst terrorist attacks and high-profile kidnappings in the Philippines.
In 2000, the Abu Sayyaf abducted 21 European tourists and Asian workers from a Malaysian resort island and brought them to Jolo. The hostages were ransomed off for millions of dollars before they were freed months later.
The following year, a separate band of Abu Sayyaf rebels seized 17 Filipino vacationers and three American tourists from a western Philippine resort. Most of the hostages were later rescued or ransomed off, but two of the Americans were killed.