The offensive launched Tuesday on the southern island of Jolo is targetting Khaddafy Janjalani, leader of the Abu Sayyaf group, as well as Jemaah Islamiyah militants Umar Patek and Dulmatin who are wanted over the 2002 Bali nightclub attacks.

A civilian guiding the troops and three rebels have been killed in the past two days while five soldiers and two militants were wounded, the military said.

''There were fresh skirmishes near Indanan (town) today. We can't determine yet if there are new casualties,'' said Jolo army commander Brigadier-General Alexander Aleo.

''We will be pushing on with the offensive today,'' Aleo said, adding that field reports indicated that Janjalani and Indonesian JI militants Umar Patek and Dulmatin were still in the area and being protected by some 150 to 200 fighters.

The US government has offered up to $ 10 million for the capture of Dulmatin and one million dollars for Patek for their roles in the 2002 nightclub bombings in Bali, Indonesia that left more than 200 mostly foreign tourists dead.

Regional intelligence officials say Dulmatin, an electronics and bomb expert trained in Al-Qaeda camps in Afghanistan, is a senior JI member who is believed to have triggered the bombs in 2002. Patek allegedly helped coordinate the attack.

It was not clear when the two entered the southern Philippines, but Filipino intelligence officials have said they were building up links with Abu Sayyaf, which like JI is considered a terrorist organization by the US.

Abu Sayyaf, or ''Bearer of the Sword'', made headlines in the late 1990s for carrying out large-scale bombings and attacks on mostly Christian targets in the south. By 2000, the group had branched out into kidnapping foreign tourists, missionaries and businessmen to fund their attacks.

Janjalani has a five million-dollar ransom on his head for the murder of a US missionary and a tourist they kidnapped in 2002.