ZAMBOANGA, Philippines (AFP) - Abu Sayyaf militants in the southern Philippines have freed two Indonesian hostages, the military said on Monday (Dec 12), as the army mounted an offensive against the Islamist kidnapping group.

The two were among seven crew seized from a tugboat off the southern Philippines in June. The others have already been released.

They were undergoing medical checks and would later be turned over to Indonesian government representatives, the military said in a statement.

It said the Abu Sayyaf handed the two over to the Moro National Liberation Front (MNLF), another armed group in the strife-torn island of Jolo, who in turn passed them to a local official.

They were then handed over to the military on Monday, the statement added.

"Indonesian (hostages) Mohammad Nazer and Robin Peter were released by the (Abu Sayyaf) captors to MNLF Commander Tahir Sali... after being pressured by non-stop operations of (military joint task force) Sulu and pressure by the MNLF," a military statement said.

The MNLF is a former Muslim separatist rebel group that has forged a truce with the government to negotiate a Muslim autonomous region in the south of the largely Christian Philippines.

Military sources say the Abu Sayyaf still has about 18 foreign hostages and five local captives, many of them seized from vessels off the southern Philippines.

The Abu Sayyaf, blamed for the worst terror attacks in the country's history, has been the target of a renewed military offensive in Jolo in recent days.

Three soldiers were killed and 17 wounded in clashes with the group in the jungles of Jolo on Saturday, the military said.

The armed forces also say they killed 10 Abu Sayyaf fighters and wounded six others based on intelligence information gathered in Jolo.

The terms of release for the Indonesians were not disclosed but the Abu Sayyaf have only freed hostages in the past after hefty ransoms were paid.

The Abu Sayyaf, founded in the 1990s with seed money from a relative of Al-Qaeda leader Osama bin Laden, has earned millions through kidnapping.

It is known to behead its victims if ransoms are not paid, decapitating a Malaysian last year and two Canadians in April and June.

While its leaders have in recent years pledged allegiance to the Islamic State in Iraq and Syria (ISIS) group, analysts say it is mainly focused on a lucrative kidnapping business rather than religious ideology.