MARAWI CITY, Philippines (Reuters) - Islamist militants locked in an urban battle with troops in the southern Philippines had planned to carve out an enclave of their own, officials said on Wednesday after the emergence of a video showing their leaders in a secret strategy meeting.

The footage, found on a mobile phone as government forces closed in on the fighters in Marawi City, showed a group of men in a room discussing how they would take hostages from a school, seal off roads and capture a highway into the lakeside town.

“There was indeed a bigger plan and it was supposed to wreak more havoc,” military spokesman Restituto Padilla told a news conference after the video became public.

The battle for Marawi has raised concern that Islamic State, on a back foot in Syria and Iraq, is building a regional base on the Philippine island of Mindanao that could pose a threat to neighboring Indonesia, Malaysia and Singapore too.

Officials have said that, among the several hundred militants who seized the town on May 23, there were about 40 foreigners from Indonesia and Malaysia but also fighters from India, Saudi Arabia, Morocco and Chechnya.

The strike on Marawi City suggested to many that pro-Islamic State outfits wanted to establish the town as a Southeast Asian ‘wilayat’ – or governorate - for the radical group, a view reinforced by the video footage.

The military has said that the fighters are increasingly penned in around a built-up area of the town, and troops have been clearing houses that the militants had defended with snipers for the past two weeks.

Philippine senators said members of the upper house were last week shown the video of the militants making their plans, a copy of which was obtained by Reuters from the Philippines military.

The men pored over a map and one, identified by a subtitle as ‘Abdullah’, pointed to three locations and discussed options for attack.

Slideshow ( 13 images )

“We can jailbreak ... we can go inside schools ... we can take hostages,” he said in a mix of regional languages and English. “But we need to seize a highway so people will be scared.”

Seated at a table among them was Isnilon Hapilon, leader of the Abu Sayyaf group who was proclaimed by Islamic State last year as its “emir” of Southeast Asia. The U.S. State Department has offered a bounty of up to $5 million for his arrest.

Hapilon has formed an alliance with the Maute group, a tactically smart, social-media savvy outfit, and at least two other factions that have lined up behind the ultra-radical Islamic State.

“It was clear that these terrorists, the Maute group, their end goal is to make Marawi ... independent, or to separate from the republic,” Senator JV Ejercito told Reuters.

“With a plan like this, this is already rebellion and a threat to national security, so declaration of martial law is justified,” he said, referring to the martial law declared by President Rodrigo Duterte across Mindanao when the siege began.

The Associated Press first reported on the video on Tuesday. Armed forces Chief of Staff General Eduaro Año told the agency that the images showed an intention to dismember “a portion of the Philippine territory by occupying the whole of Marawi City and establishing their own Islamic state or government”.

‘NOT A RELIGIOUS WAR’

The fighters prepared for a long siege, stockpiling arms and food in tunnels, basements, mosques and madrasas, or Islamic religious schools, military officials say. The Philippines is largely Christian, but Marawi City is overwhelmingly Muslim.

Slideshow ( 13 images )

Progress in the military campaign has been slow because hundreds of civilians are still trapped or being held hostage, some as human shields, the military said.

A Catholic priest and about a dozen of his parishioners were taken on the first day of the battle by militants who burst into the town’s cathedral and set it alight.

Military spokesman Padilla appealed to social media users not to circulate material - such as video images of the militants destroying religious statues and pulling down a cross inside a church - that may fan religious tension.

“Let us not buy into the plan of these terror groups to inflame the feelings of our other religions,” he said. “This is not a religious war.”

A four-hour ceasefire to evacuate residents trapped in the town was interrupted by gunfire on Sunday, leaving some 500 to 600 inside with dwindling supplies of food and water.

Officials say that 1,545 civilians have been rescued.

The latest numbers for militants killed in the battle is 134, along with 39 security personnel. The authorities have put the civilian death toll at between 20 and 38.