According to a military report, another 16 Philippine soldiers were wounded when they came under fire from rebels on Sunday.
The report said the attack took place in Maimbung town on Jolo island, 1000km south of Manila, but did not say when the incident happened.
"There's heavy fighting going on in Panamao and Luuk areas," Lieutenant-General Alberto Braganza, the most senior commander in the southern Philippines, said. "They are taking a last stand in the mountains."
The military said more than 50 rebels had been killed in the clashes, but so far less than 10 bodies had been recovered.
The military added that it had lost 30 soldiers, including a battalion commander hit by rebel mortar fire.
Truce offer rejected
Relief agencies say more than 13,000 people have been displaced because of the fighting.
Muslim leaders and local officials have renewed appeals for a ceasefire, saying food, medicines and blankets are running low despite government relief efforts.
"They do not like to surrender, they will fight to the death"
a separatist ally
The government has rejected calls for a truce, with the army vowing to crush the rebellion and neutralise the separatists.
President Gloria Arroyo reiterated her rejection for calls for a ceasefire, saying her government will not negotiate with the rebels.
A presidential spokesperson on Saturday said calls for a ceasefire were appreciated, but justice had to be served first.
Rebels have also said they will not give in. "They do not like to surrender, they will fight to the death," said Absalom Cerveza, an ally of jailed separatist leader Nur Misuari and a member of the rebel panel that negotiated a peace deal with the government in September 1996.
He said he had talked to rebel leaders on Friday, telling reporters the fighters were "in high spirits and far from being crushed".
Unidentified US military officials
arrived in Jolo on Wednesday
Braganza said a team of US-trained troops was flown to the frontlines on Sunday to reinforce nearly 4000 soldiers fighting a breakaway group of the Moro National Liberation Front (MNLF) since fighting started on Monday.
An unidentified group of US soldiers were seen arriving in Jolo on Wednesday, only two days after fighting broke out.
Fighting broke out after rebels allegedly were angered over the killing of four civilians, including a 14-year-old boy, in what the Philippines says was a military operation in Maimbung this month.
It has been reported that the wife and two children of an MNLF leader were among those killed, in what the army says was crossfire.
The clashes on Jolo are the bloodiest since 2001, when 500 people were killed in a failed uprising led by Misuari, but they are unlikely to affect peace talks with the larger Moro Islamic Liberation Front (MILF), which broke from the MNLF in 1978.
An ally of the fighters says they
are far from being defeated
Talks with the MILF, negotiated by Malaysia, are to resume next month in Kuala Lumpur.
Support of locals
No organised military campaign has had lasting success on Jolo island since the 16th century, when Spain colonised the archipelago.
The US military failed to contain warriors in Jolo at the turn of the 20th century, at the start of the American occupation of the Philippines.
The Philippine military has launched campaigns on Jolo in an attempt to crush the separatists.The separatists, however, have control of the terrain and support from the local population.