Philippine troops battled heavily armed militants backing the Islamic State group in a southern city Tuesday, as months of sporadic fighting in the countryside shifted alarmingly into an urban area.

Regional military spokesman Lt. Col. Joar Herrera said five government personnel were wounded in the clash with at least 15 fighters from a Muslim rebel group called Maute in the village of Basak Malutlut in Marawi, a bustling predominantly Muslim city in Lanao del Sur province.

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Troops and special police forces attacked an apartment after the military obtained intelligence that Maute gunmen were hiding there with a top terror suspect, Herrera and another military official said.

"We're trying our best to contain the situation," Herrera said by telephone, adding that troops were moving carefully to avoid hitting civilians in the area of the fighting.

Officials could not immediately tell with clarity what was going on, and said they were checking reports that the militants had entered a hospital and raised a black Islamic State-style flag.

The Maute group is one of less than a dozen new armed Muslim groups that have pledged allegiance to the Islamic State group and formed a loose alliance in the southern Philippines in recent years.

It has been blamed for a bomb attack that killed 15 people in southern Davao city, President Rodrigo Duterte's hometown, last September and a number of attacks on government forces in Lanao, although it has faced setbacks from a series of military offensives.

In April, troops backed by airstrikes killed dozens of Maute militants and captured their jungle camp near Lanao del Sur's Piagapo town.

Troops found homemade bombs, grenades, combat uniforms and passports of suspected Indonesian militants in the camp.