Seven marines and seven Abu Sayyaf fighters were killed in the gunbattle, which raged for an hour Saturday in a sparsely populated village near coastal Patikul town in Sulu province. Six marines and about 10 gunmen were wounded, marine Col. Jose Cenabre said.
Government troops backed by assault helicopters were hunting down the fleeing militants, who were believed to be led by Jul-Aswan Sawadjaan, an Abu Sayyaf commander accused in the kidnappings of a Jordanian journalist and two European bird watchers who are still being held by the militants.
He said the marines initially had difficulty returning fire because the dozens of militants took cover near a row of houses.
The firefight was part of a new military offensive that started last week and is aimed at rescuing the three foreign captives, who were abducted last year, along with three Filipinos kidnapped separately by the militants in recent weeks, he said.
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Although a large number of marines and policemen are involved in the offensive, only small units have been deployed to hunt down the Abu Sayyaf in two jungle encampments in Sulu, Cenabre said without providing details of the operation. U.S. forces were providing intelligence but were not involved in actual combat, he said.
US backed military offensives have crippled the Abu Sayyaf in recent years, but it remains a key security threat.
Washington lists the group as a terrorist organization. Philippine troops and police special forces, meanwhile, killed one of two gunmen who were trying to extort money Saturday from a restaurant in Sulu's capital town of Jolo, Cenabre said.
Armed with pistols, the two men shot it out with government forces. One was shot in the head and died and the other was captured, Cenabre said. He said investigators were trying to determine whether the two had ties with the Abu Sayyaf, which is also notorious for extortion.