Marine snipers fired at a group of Abu Sayyaf gunmen who tried to breach a loose cordon around a forested area near Jolo's Indanan township where the militants have held three International Committee of the Red Cross workers hostage since Jan 15, Brig. Gen. Gaudencio Pangilinan said.

The military, backed by hundreds of village guards, set up key positions around the area to prevent the kidnappers from escaping with the hostages into the vast mountainous heartland of Jolo Island.

Military officials have ordered troops and guards not to launch any rescue attempt to ensure the safety of the hostages and to allow local officials to negotiate the captives' safe release.

The Abu Sayyaf, however, has demanded that the military back off from its stronghold before any negotiation can take place.

Sen. Richard Gordon, who heads the Philippine branch of the Red Cross, appealed to the military and the Abu Sayyaf not to take any steps that might endanger the hostages - Swiss Andreas Notter, Filipino Mary Jean Lacaba and Italian Eugenio Vagni.

Military officials said they were unaware if any of the three were hurt in the gunbattle. 'We're obviously very concerned,' Mr Gordon said.

Mr Pangilinan said no marines were wounded in the clash with at least 10 Abu Sayyaf gunmen.

A marine officer said at least two militants were hit by gunfire, possibly including Abu Sayyaf commander Albader Parad. The marines could not approach to confirm if Parad was wounded or killed because of sporadic rebel fire, said the officer, who spoke on condition of anonymity because he was not authorized to talk to the media.

The military is trying to confirm if Parad was hit, Mr Pangilinan said. US and Philippine officials have offered a reward for the capture or killing of Parad, a young militant who has gained notoriety for alleged involvement in past kidnappings and beheadings. Last month, Parad acknowledged on television that his group was holding the Red Cross workers. -- AP