Philippine army generals say dozens of Islamic State group-l.
Armored Personnel Carriers make their way through a queue of vehicles with fleeing residents that stretches for miles (kilometers) as Muslim militants lay siege in Marawi city in southern Philippines for the third day Thursday, May 25, 2017.
The admission confirms what observers see as moves by IS targeting Muslim-majority parts of the southern Philippines to establish a stronghold in South-East Asia.
Padilla said 11 soldiers, two policemen and 31 militants had been confirmed killed in the fighting, which has involved the military bombing buildings where the militants have been hiding.
It was not immediately clear whether civilians were among the dead.
The violence has forced thousands to flee and raised fears of growing extremism in the country.
In his speech to the troops, Duterte said said ISIS "is here already" and flying its flags.
He gave his troops a free hand to wrest control of Marawi.
Last Friday, Duterte also said that searches and arrests can be carried out without any warrants.
But the military was surprised by jihadi fighters, and the militants have dug in. Duterte also prioritised peace negotiations with communist rebels over talks with the much more powerful Islamist insurgents, particularly the Moro Islamic Liberation Front. "But those who are out-and-out terrorists, and you can not be convinced to stop fighting, so be it. Let us fight".More news: England v South Africa
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"Right now, he is still inside (the city)", Gen. Eduardo Ano told The Associated Press. "I'm just praying that the bullets will not find their way to my house and hit us". He was wounded in a Philippine airstrike in January but got away. "We have to finish this".
Solicitor General Jose Calida said Indonesians and Malaysians are fighting alongside the gunmen who attacked Marawi, a city of some 200,000 people on Mindanao island.
"Also, the new Foreign Affairs Secretary Alan Peter Cayetano thanked Moscow for its commitment to strengthen cooperation with Manila, particularly in security and intelligence cooperation and in stepping up measures to combat terrorism, specially amid violence in Southern Philippines", he said. The military says the death toll since Tuesday is close to 100, the AP reports.
Romeo Enriquez said he is fine, adding that there may have been confusion because a former Malabang police chief was killed in the fighting - but he was not beheaded. Enriquez has been in the job for about two months.
Duterte and military chiefs have said most of the militants belong to the local Maute group, which has declared allegiance to Daesh and which the government estimates has about 260 armed followers.
All these groups are inspired by the Islamic State group, but so far there is no sign of significant, material ties.
Washington has offered a $5 million reward for information leading to Hapilon's capture, but he has proved elusive.
There have been Muslim separatists in the region for decades, but recently groups have been aligning with ISIS.
The president of the Philippines says martial law will remain in place until the military confirms the country is safe. "It will just exacerbate the situation", said Renato Reyes of the New Patriotic Alliance group.
On the implementation of martial law, Duterte reiterated his instruction to kill the armed men who fight the government.
The 1987 constitution imposes limits on martial law to prevent a repeat of the abuses under dictator Ferdinand Marcos, who was deposed by a famous "People Power" revolution the previous year.