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Manila (AFP)

Islamist militants occupying a southern Philippine city have forced nearly 400,000 people in the wider area to flee their homes, officials said Saturday, while warning of disease outbreaks and psychological trauma among refugees.

The city of Marawi, considered the Muslim capital of the largely Catholic Philippines, has been reduced to a ghost town after self-styled followers of the Islamic State movement launched an assault on the city on May 23.

For more than a month, the government has deployed jet fighters, attack helicopters and armoured vehicles to crush the militants who are members of the so-called Maute group.

The fighting has left over 400 people dead, while the Maute fighters still control parts of the city, using snipers and improvised explosive devices to slow the military's advance.

Liza Mazo, the regional civil defence director, said it was not just the city's residents leaving the area but also people living in the surrounding communities.

Out of 389,300 who have fled, over 70,380 people have been housed in 79 government-run evacuation centres, while the rest have sheltered with their relatives, according to social welfare department figures.

Mazo said that relief officials have struggled to deal with outbreaks of illness at the evacuation centres as government forces continue to launch air strikes and artillery barrages against the militants.

"There are alarming cases of skin diseases and gastroenteritis. We want to control the outbreak, not just in the evacuation centre but even the home-based (refugees)," she said.

"There are also cases of psychological trauma from the fighting."

Some 26 people who have fled Marawi have since died in hospitals from various ailments, according to the health department's local spokesman Jun Galban, but he declined to say whether their deaths were related to the evacuation.

President Rodrigo Duterte, who declared martial law over the southern Philippines to deal with the crisis, vowed on Saturday that government forces would crush the extremists.

"We will not go out there (Marawi) until the last terrorist is executed," he said in a speech to government workers.

At one point in his speech, to demonstrate his seriousness, he lifted his shirt to reveal a holstered pistol.

But he conceded, "we are having a hard time."

"We never realised the magnitude of their preparation for their explosives. We got there, they were positioned (with) their snipers. We practically had to climb upward," he said.

© 2017 AFP