Police commandos cordoned off parts of Zamboanga City on the island of Mindanao after a rogue faction of the Moro National Liberation Front (MNLF) took hostages and tried to march to the city hall to raise their flag, an army commander said.
"They want to hoist their flag, we will not allow that," Colonel Andrelino Colina told a local radio station, saying dozens of armed MNLF landed in two coastal villages at dawn and clashed with security forces.
Three people were killed and 10 wounded as the rebels forced their way to the city centre.
"We condemned the attack on Zamboanga City in the strongest possible terms," Edwin Lacierda, the president's spokesman said in a statement. "The ongoing attack of armed individuals in Zamboanga City, including initial reports of the possible use of civilians as human shields is a cause for great concern."
The gunmen belong to a Muslim rebel group that entered into a peace agreement with government in 1996 and was allowed to run a Muslim autonomous region. Five years later, the group took up arms again, claiming the government did not fully implement the peace agreement.
In Kuala Lumpur, the government and the largest Muslim rebel group, the Moro Islamic Liberation Front (MILF), are preparing for peace talks to conclude a deal on power-sharing and the establishment of a larger autonomous Muslim region by 2015.
"They are trying to spoil the peace process," Mohagher Iqbal, MILF chief peace negotiator, told Reuters by phone.
An official from the Office of the Presidential Adviser on the Peace Process, Joe Lorena, said the attack could have been triggered by rumors that talks in Kuala Lumpur might result in the termination of an earlier deal with the gunmen's group.
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