At least 11 soldiers have been killed after Philippines Air Force plane bombed in a southern city targeting at Muslim militants who are holding hostages as human shields, the authorities said on Thursday.
Defence Minister Delfin Lorenzana said two SF-260 plans had dropped bombs on Islamic State targets in the city centre, and that it was "very sad" that they had hit some of their own troops in the process.
Lorenzana said airstrikes may be curtailed because of the friendly fire incident, but military spokesman Padilla insisted the soldiers' deaths would not weaken the resolve of the armed forces.
"Sometimes in the fog of war, a lot of things could happen", he added.
Lorenzana said militants who were Saudi, Malaysian, Indonesian, Yemeni and Chechen were among eight foreigners killed fighting with the Maute rebels.
Rohan Gunaratna, a terrorism expert at Singapore's S. Rarajatnam School of International Studies, believes that IS and the smaller regional groups are working together to show their strength and declare a Philippine province part of the caliphate that IS says it created in the Middle East.
He said the corridor will be implemented by the government and the main separatist group, the Moro Islamic Liberation Front, which has signed a peace agreement in exchange for Muslim autonomy in Mindanao, the southern third of the Philippines.
Over the last week militants allied to the so-called Islamic State have engaged in street battles with the army leaving more than 100 people dead.
However Padilla warned of more intense battles ahead, with the military believing three of the militants' main leaders were likely still in the city.
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Philippine president Rodrigo Duterte, who has declared martial law across Mindanao, ruled out negotiating with the militants, calling them terrorists. "You can not use them for anti-insurgency, which is the problem at the moment".
The errant bombing was one of several airstrikes the military conducted Wednesday as troops on the ground tried to dislodge the militants.
The slow pace of the military's efforts to retake Marawi - with air support and far superior firepower than the rebels - has prompted questions about its strategy.
The unrest has boosted fears that the Islamic State group's violent ideology is gaining a foothold in the country's restive southern islands, where Muslim separatist rebellions have raged for almost half a century.
Padilla said 960 civilians have been rescued and an estimated 1,000 residents remain trapped.
"We secured the bridges and we're pushing toward to the lair of the enemy", said Lieutenant Colonel Jo-Ar Herrera. "I will not talk to anybody", he said on Wednesday.
"We will come up with a report", he added.
The conflict began after security forces attempted to capture top militant leader Isnilon Hapilon, who is considered as the Islamic State's leader in the Philippines.