Twelve Philippine soldiers were killed and 10 others missing in a clash with the country's largest Muslim guerrilla group on Tuesday, the military said.
Fighting erupted at dawn between a military special forces unit and the Moro Islamic Liberation Front (MILF) unit on the southern island of Basilan, said the regional military spokesman, Lieutenant Colonel Randolph Cabangbang.
"We suffered casualties and currently our count is 12 killed in action, 11 wounded in action and 10 missing in action," the army officer told reporters in the nearby port of Zamboanga.
He said the gunmen could have been led by Dan Laksaw Asnawi, an MILF leader who escaped from a Basilan jail in December 2009.
He had been on trial for the beheading of 14 Philippine Marine troops in a 2007 attack in the same area, and had since been implicated in kidnapping activities, Cabangbang said.
"Our troops were operating based on the information of the presence of an armed group, possibly (holding) kidnap victims," he said without naming the supposed hostages.
He said the military was in contact with MILF representatives amid fears that the rebels could have taken the missing soldiers hostage.
Von al-Haq, spokesman for MILF, earlier acknowledged its forces were involved in the fighting, which both sides said took place near the town of Al-Barka.
"Yes, they (military) attacked our forces. So far, no casualties on our side," the rebel spokesman told AFP.
He could not be reached for comment late Tuesday over the whereabouts of the missing soldiers.
The rebel group is observing a ceasefire amid peace talks with the Philippine government, and al-Haq accused the military of violating the truce.
Cabangbang however rejected the ceasefire violation charge.
"They did not intrude into MILF areas," Cabangbang said.
Al-Barka is a frequent flash point of a decades-long MILF armed insurgency that has claimed about 150,000 lives across the south of the mainly Catholic Philippines.
The rebellion began as an independence bid but now seeks self-rule for the region's large Muslim minority.
In recent years Basilan has also become a hotbed of the Abu Sayyaf, Islamist militants that began operating two decades ago.
The military said the group was set up with seed funds provided by a nephew of Al-Qaeda leader Osama bin Laden. The militants often resort to kidnappings -- mainly targeting foreigners and Christians -- to raise funds from ransoms.
The group was blamed for the bombing of a ferry in Manila Bay in 2004 that claimed more than 100 lives and was the nation's worst terrorist attack.