Security officials have reported killing eight Islamist militants - including an Indonesian suspected of helping to plot the deadly 2002 Bali bombings - in the southern Philippine island of Mindanao.
In a report, Major Filemon Tan Jr, a spokesman for the Armed Forces Western Mindanao Command, identified the Indonesian as Ibrahim Alih, who also went by the name Abdul Fatah.
Fatah, a former member of the regional terror group Jemaah Islamiah (JI), was arrested in connection with an attack on the Australian Embassy in Jakarta on Sept 9, 2004. He was sentenced to seven years' jail in 2005 for helping to assemble the bomb used in the attack that left 10 dead, including the suicide bomber.
He had also been linked to a spate of bombings in the tourist district of Kuta in Bali on Oct 12, 2002, that killed 202 people, most of them tourists.
Maj Tan said soldiers from the 1st Marine Brigade were on patrol when they clashed with a group of bandits, including Fatah, at around 5.30am on Thursday in a village in Sultan Kudarat province, 1,600km south of capital Manila. The firefight lasted for 45 minutes, he said.
Recovered later at the scene were five flags of the Islamic State in Iraq and Syria (ISIS), two assault rifles, a handgun, radios and bomb materials. Islamist militants in Mindanao have been seen displaying ISIS flags as early as 2010.
The Philippine Daily Inquirer reported that security officials had been chasing a 40-man group led by one Mohamad Jaafar Sabiwang Maguid for cattle-rustling, extortion and drug trafficking.
Maj Tan did not identify in his report the seven others killed with Fatah, or whether Maguid was among them. He said Maguid's group was part of a terrorist cell known as Ansar Khalifah Philippines, based in Sarangani province in Mindanao, which had been seeking official recognition from ISIS.
Ansar Khalifah is said to be sheltering at least three South-east Asian extremists who have returned after fighting in Syria.
"What is sure is that there is a group not recognised by ISIS, but there are ISIS flags. If they have links with Abu Sayyaf or the Bangsamoro Islamic Freedom Fighters (BIFF), we have yet to establish that," Maj Tan said.
In Manila, President Benigno Aquino's spokesman Herminio Coloma told reporters that "there are continuing efforts to verify if indeed there are possible links" between Maguid's group and ISIS.
Amid unconfirmed reports that at least 100 Filipinos have left for Syria, the Philippine military insists ISIS' presence in the Philippines "is very remote, very small".
According to officials and security analysts, at least four groups of Muslim militants in Mindanao have been trying to coalesce into a single group to seek recognition and funding from ISIS. These are Abu Sayyaf, BIFF and two Islamic fundamentalist groups: the Rajah Solaiman Islamic Movement (RSIM) and the Khilafah Islamiyah Mindanao (KIM). They are reportedly linking up with other terror networks in Malaysia and Indonesia to form an "official" South-east Asia faction of ISIS.
BIFF and Abu Sayyaf have pledged allegiance to ISIS in videos posted on YouTube. But neither is believed to be getting funding or logistics support from ISIS.
KIM, led by Afghan-trained Islamic cleric Humam Abdul Najid, has been fighting to establish an "Islamic Emirate of the Philippines". Security officials hold it responsible for the July 26 bombing of an arcade in Mindanao that killed eight people.
RSIM is believed to have worked with Abu Sayyaf and Malaysia's Jemaah Islamiah on the 2004 bombing of a ferry and a spate of Valentine's Day attacks in 2005.