Army spokesman Lieutenant-Colonel Preme Monta said a battle in the northern town of Santa Ignacia on Tuesday was triggered by a rebel raid at dawn.

"Our troops were prepared for this," Monta told reporters, adding that soldiers and police officers stopped the rebels before they could destroy the telecommunications facility.

He said the incident was the biggest single setback for the NPA this year, but said only eight bodies were recovered at the scene of the fighting. He said four soldiers were wounded.

The armed wing of the Philippine communist party, which is leading an insurgency that has killed more than 40,000 people since the late 1960s, has been labelled as a foreign terrorist group by the United States and some European states.

Collapsed talks

Peace talks between the rebels and the government, negotiated by Norway, collapsed in August 2004 because Manila declined a request by the rebels to persuade Washington and others to remove them from the blacklist.

The Philippines, Washington's closest security ally in Southeast Asia, estimates that the NPA membership at 7000  is down from a peak of more than 25,000 in the mid-1980s.

In an interview with Reuters in January, Philippine officials said the communist rebels were the main security threat to the country.

Philippine security forces are also fighting several Muslim groups, some of which are suspected of having links to al-Qaida and the regional network Jamaah Islamiyah.