UPDATED: Thousands flee Philippine fighting

Tens of thousands of people have fled their homes in southern Philippines after fierce clashes between Muslim separatists and government troops broke out.

But officials vowed to press on with a contentious local election on Monday.

The separatist Moro Islamic Liberation Front (MILF) had called for elections in the six-province Autonomous Region of Muslim Mindanao to be cancelled because they want a new Muslim homeland with more political powers established as part of a comprehensive peace deal.

The Philippine military pounded rebel Muslim positions on Sunday, shooting off a barrage of artillery and mortar fire and firing rockets from helicopters at suspected MILF positions in North Cotabato province after hundreds of separatists refused to leave Catholic farmlands they have occupied since last month.

Lieutenant-General Cardozo Luna, the military vice-chief of staff, said the separatists entrenched themselves in the remote villages despite a government ultimatum to leave.

Breakaway group

Luna said the military operation, involving more than 2,000 troops, was not directed against MILF in general, but a group headed by MILF commander Umbra Kato, who is no longer following the orders of the group's main leadership.

"The MILF rebels have defied their own leadership and have refused to leave the area," he said.