MANILA—One of the U.S.’s most-wanted terrorists was among the last remaining leaders killed Monday after Philippine forces pressed forward with their offensive to retake the southern city of Marawi from Islamic State-linked militants, authorities said.

The bodies of Isnilon Hapilon and Omar Maute were recovered after the two leaders were killed as they moved between concrete structures and mosques in the city’s old central business district with a few dozen other fighters and hostages, government spokesman Ernesto Abella said...