Ground troops hid behind walls and armoured vehicles and exchanged volleys of gunfire with Maute group fighters on Thursday, firing into elevated positions occupied by militants who have held Marawi City on Mindanao island for two days.
Helicopters circled the city, peppering Maute positions with machinegun fire to try to force them from a bridge vital to retaking Marawi, a mainly Muslim city of 200,000 where fighters had torched and seized a school, a jail, a cathedral, and took more than a dozen hostages.
"We're confronting maybe 30 to 40 remaining from the local terrorist group," said Jo-Ar Herrera, spokesman for the military's First Infantry Regiment.
Duterte declares martial law in the Philippines
The battles with the Maute group, which has pledged allegiance to Islamic State, started on Tuesday afternoon during a failed raid by security forces on one of the group's hideouts, which spiralled into chaos.
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The turmoil was the final straw for President Rodrigo Duterte, who delivered on his threat to impose martial law on Mindanao to stop the spread of radical Islam.
Islamic State claimed responsibility late on Wednesday for Maute's activities via its Amaq news agency.
At least 21 people - seven soldiers, 13 rebels and a civilian - have been killed and religious leaders say militants were using Christians taken hostage during the fighting as human shields.
Hundreds of civilians, including children, were sheltering in a military camp in Marawi City as troops helped clear the remaining people from streets.
Hostilities eased overnight but flared late on Thursday morning when troops started their clearing operations.
Tuesday's raid was aimed at capturing Isnilon Hapilon, a leader of radical faction of another militant group, the Abu Sayyaf.
The government says Hapilon is a point man for Islamic State and has been collaborating with the Maute group.
"Based on our intelligence, Isnilon Hapilon is still in the city," Herrera said.
