Philippine military forces have continued their offensive against armed groups linked to the Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group in the country's south, killing at least nine fighters as the conflict in Marawi continues.

On Thursday morning, fighters from the Maute Group and Abu Sayyaf engaged with the military forces who retaliated with air attacks and artillery fire, Captain Jo-Ann Petinglay, military spokesperson, told Anadolu news agency.

"Those enemies who died in the offensives include men of Abu Sayyaf leader Isnilon Hapilon who are digging for a tunnel under a mosque trying to escape the battle zone or reach the lake," Petinglay said.

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Hapilon, who is wanted by the FBI and has a $5m bounty on his head, is suspected to have led the siege in Marawi which is now in its 12th week.

His group, Abu Sayyaf, had previously pledged loyalty to al-Qaeda.

Earlier, the military confirmed that Hapilon was still alive and inside the battle zone, despite earlier reports he had escaped along with Abdullah and Omar Maute, local leaders of the Maute group that has pledged allegiance to ISIL.

The Philippine government has also offered a separate reward for the capture of Hapilon and the Maute brothers.

According to Petinglay, the number of deaths on the side of Maute and Abu Sayyaf has gone up to 548 due to continuous fighting in Marawi - a once bustling university town in Mindanao.

At least 122 soldiers have also been killed while 45 civilians have died in the fighting.

The remaining fighters, including several foreigners, have at least 100 civilian hostages. Four were recently rescued.

President Rodrigo Duterte declared martial law on the whole island of Mindanao after the Maute group attacked Marawi on May 23.

When the fighting began, the military had initially vowed to end it within weeks. But the fighting continues into its third month now, and martial law has been extended until the end of 2017.

The armed conflict has displaced about 359,680 people, as of July 29, with many living in host communities or in 75 evacuation centres across Mindanao.

More than 200,000 children have also been displaced. Many of those living in host communities are affected by the scarcity of household resources, including food, medical and school supplies, in one of the poorest areas in the country.