At least 13,000 people crammed into Zamboanga city sports stadium seeking safety as soldiers and rebels fought street battles in deserted coastal neighbourhoods nearby, an AFP photographer on the scene said.
"We're trying our best to provide decent facilities for them," government social worker Beth Dy told AFP, but added the venue only had four portable toilets and no available bedding.
About 5,000 residents from the six communities under siege arrived overnight and some had no choice but to pitch makeshift tents on the grass, she added.
One of the residents was waving a white cloth tied to a pole, he added.
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People began fleeing the siege areas early Monday when about 180 Moro National Liberation Front guerrillas poured into six coastal neighbourhoods of the port city of nearly one million people, triggering firefights with soldiers and police.
The six communities are home to 160,000 mainly Muslim residents, according to local officials, who said about 180 residents were being used as "human shields" by the gunmen.
The MNLF ended a 25-year rebellion with a 1996 peace treaty, but Misuari's faction laid a similar deadly siege on Zamboanga in 2001 that led to his imprisonment until 2008, when all charges against him were dropped.
Misuari has since been protesting against a proposed government peace deal with rival rebel faction the Moro Islamic Liberation Front (MILF) that he said would marginalise the MNLF and violate the terms of the 1996 peace deal.
The latest fatality was an MNLF gunman whose body was recovered in one of the areas where the gunmen are holed up, he said in an interview on ABS-CBN television.