Philippine troops battle IS-linked gunmen

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Heavily armed Muslim militants are said to have raised the flag of the Islamic State group over a city in the Philippines - as months of fighting in the countryside spilled over into urban areas.

Hapilon reportedly has been chosen to lead an Islamic State group branch in Southeast Asia and is on the U.S. Department of Justice list of most-wanted terrorists worldwide, with a reward of up to $5 million for his capture.

Philippine President Rodrigo Duterte warned on Wednesday he would deal harshly with militants after declaring martial law on Mindanao island following a failed raid on a hideout of Islamic State-linked rebels.

Duterte, 72, known internationally for waging a war on drugs that has claimed thousands of lives, had said on many occasions since becoming president past year that he was prepared to declare martial law nationally as well as in Mindanao.

"Otherwise, they will kill the hostages", De la Pena was quoted saying in CBCP News, the official news website of the Catholic Bishops' Conference of the Philippines.

"Five jasus or spies of the Philippine Army were executed in Marawi City in southern part of the Philippines", Amaq news agency, an IS propaganda arm, reported in its bulletin.

Duterte also said that militants who stormed southern Marawi city beheaded the local police chief at a checkpoint they set up.

"This is on the grounds of resistance and rebellion based on what is happening", he said, adding that martial law would last for 60 days, as stipulated in the constitution.

This photo taken on May 15, 2017 shows Philippine soldiers standing next to a dead body of one of the two Abu Sayyaf militants killed in an encounter with troops in Calape town, Bohol province, central Philippines.

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Duterte tagged on September 3, the Abu Sayyaf, an Islamic militant group from the southern Philippines notorious for kidnappings, as a possible suspect in a deadly blast in his home town of Davao.

"We will conduct house-to-house clearing and do everything to remove the threat there".

Duterte had repeatedly threatened to place the south, the scene of decades-long Muslim uprisings, under martial law if extremist violence spiraled out of control.

Abella said Duterte would cut short his trip to Moscow, cancelling a planned meeting with Russian President Vladimir Putin, and return to the Philippines.

"Containing these terrorists could have been easier if the area is not a built-up community, however, as our troops have inch closer to the enemy, they also need to make sure that the civilians are safe", Galvez said.

Duterte has faced worldwide criticism for his violent approach to tackling the illegal drug trade.

Fighters quickly dispersed, torching buildings and taking over bridges, a hospital, two jails, a church and a college.

The group is named after its leaders, the Maute brothers, both Filipinos with extensive ties to the Middle East, according to the military.