Iqbal said the conflict was ignited by a land dispute between native Muslims and Christian settlers in Midsayap.
"The fighting must be stopped because it could affect the peace process," he said. "We've called up the international peace monitors to defuse the tension before it could further escalate into a full-blown war."
Lieutenant-Colonel Julieto Ando, a military spokesman in Cotabato, said fighting broke out when soldiers chased a group of armed men raiding rice farms in Midsayap, seizing produce.
"We're still trying to confirm casualties from both sides," Ando said, adding that they were not after Milf separatists in the area.
Iqbal said the troops were using howitzers and aerial bombardment.
"We're definitely filing a protest before the ceasefire panel," he said, asking the Malaysian-led International Monitoring Team to help stop the military operations.
A truce between the government and the Milf, the largest of four Muslim rebel groups in the southern Philippines, has been holding since July 2003 despite minor skirmishes.
Peace talks, brokered by Malaysia since March 2001, stalled last May because of differences over the size and wealth of a proposed homeland for about three million Muslims in the south of the country.
In December, Milf rejected a proposal by the government to resume negotiations because it was not satisfied with offers that would expand the existing five-province autonomous region for Muslims.