MARAWI, Philippines (AFP) - Philippine security forces dropped more bombs on Saturday (May 27) on a southern city where they have been battling Islamist militants for five days, vowing no let up despite the start of Ramadan.

President Rodrigo Duterte declared martial law across the southern third of the Philippines in response to the clashes, which have claimed at least 48 lives and which he has said are part of a campaign by the Islamic State in Iraq and Syria (ISIS) group to establish a local caliphate.

"We have identified where they are consolidating so we are doing surgical air strikes to destroy the local terrorist group," military spokesman Lieutenant Colonel Jo-ar Herrera told AFP.

Truckloads of marines were also seen driving into Marawi. One of the biggest Muslim-populated cities in the mainly Catholic Philippines, its population of about 200,000 residents had largely been evacuated because of the fighting.

The violence erupted on Tuesday when dozens of gunmen went on a rampage throughout Marawi in response to an attempt by security forces to arrest Isnilon Hapilon, a veteran Filipino militant regarded as the local leader of ISIS.

The gunmen planted black ISIS flags, took a priest and up to 14 other people hostage from a church, and set fire to buildings.

Thirteen soldiers, two policemen and 31 militants have died in the fighting, according to authorities.

Two civilians were also confirmed killed inside a hospital that the gunmen had occupied on Tuesday, and the military has said it investigating reports that nine people were murdered at a checkpoint the militants had set up.

Duterte has vowed to extinguish the threat of the militants, whom he has said belong to the local Maute terrorist group but are being backed by criminals in the area.

PRAYERS TO END 'TERRORISM'

Nevertheless, Duterte also said on Friday that he was prepared to talk with the group's leaders.

His spokesman, Ernesto Abella, said this was partly an offer made in the spirit of the Muslim holy month of Ramadan, which began in the Philippines on Saturday.

"Together we pray for an end to terrorism that falsely claims to advance Islam and seeks to subjugate our land to the brutal IS," Abella said in a statement, referring to the group by its other name.

"In this spirit of Muslim peace, the president has offered the hand of peaceful dialogue to terrorist groups, to avoid bloodshed in this time of prayer, fasting and mercy."

However there appeared to be an extremely small chance of talks, unless they were to negotiate the release of the hostages.

Military spokesman Herrera said the security operations to rid Marawi of the gunmen would continue despite the start of Ramadan.

"It is painful for the Maranao (the name for local Muslims) that it is Ramadan but our action now is to protect Marawi," Herrera said. "These are the impacts of the local terrorist group's actions."

The battle to clear the city of the gunmen was proving hard because they had scattered into small groups and were moving to different houses and setting up sniper positions, according to the military.

"They also have sympathisers from private armed groups," Herrera said.

Islamist militants working with criminals and corrupt politicians is common across Mindanao, where a Muslim separatist rebellion has claimed more than 120,000 lives since the 1970s.

The Maute, Abu Sayyaf and other small hardline groups are not interested in negotiating peace and have in recent years looked to ISIS to help them.