The Philippine military declared an eight-hour ceasefire Sunday in its offensive against Islamist militants occupying parts of the war-torn city of Marawi, to allow residents to celebrate the end of Ramadan.

Assaults backed by air and artillery bombardment stopped at the start of Islamic prayers at 6am but gunfire erupted as soon as the truce ended around 2pm, AFP reporters in Marawi said.

Military chief General Eduardo Ano ordered his forces to observe a "humanitarian pause" during the Eid al-Fitr holiday in Marawi, the most important Muslim city in the mainly Catholic Philippines.

"We declare a lull in our current operations in the city on that day as a manifestation of our high respect to the Islamic faith," Ano said in a statement.

The Eid al-Fitr festival ends the fasting month of Ramadan.

Hundreds of militants, flying the flag of the Islamic State group and backed by foreign fighters, seized swathes of Marawi in the southern region of Mindanao last month, sparking bloody street battles and raising regional concern.

Troops have launched a relentless air and ground offensive but have failed to dislodge gunmen from entrenched positions in pockets of the city.

Much of the lakeside city is now in ruins while most of its 200,000 residents have fled to evacuation centres or to the homes of relatives and friends in other towns.

At Iligan just north of Marawi, evacuees dressed in colourful flowing robes marked the end of Ramadan by holding prayers on the grounds of city hall.

Armed commandos from the police Special Action force stood guard as the prayers were held.

Presidential spokesman Ernesto Abella said Sunday a Philippine Navy ship was sent to Cotabato south of Marawi to bring supplies for soldiers involved in the fighting and serve as a floating hospital for the wounded.

- Civilians trapped -

Military spokesman Brigadier General Restituto Padilla said around 500 civilians remained trapped in areas where the fighting is concentrated.

After the ceasefire ends "we will continue to try to enter the areas occupied by them and liberate Marawi", Padilla said on radio station DZBB.

Nearly 300 militants and 67 troops have been killed in the fighting, according to official figures.

"This (Eid) is memorable because we are celebrating it away from our homes," said Marawi's mayor Majul Usman Gandamrahe.

"We are hoping that this problem will soon be over... I urge everybody to continue praying so that the turmoil in our city of Marawi will end," he said on ANC television.

In May Philippine President Rodrigo Duterte declared martial law across all of Mindanao to quell what he described as a rebellion aimed at establishing an Islamic State caliphate in the area.

Foreign fighters, including those from Chechnya, Indonesia and Malaysia, are among those killed in the Marawi conflict.

A senior military commander said on Saturday that Isnilon Hapilon, a leader of the Marawi attack and one of America's most wanted terrorists, may have slipped out of the city.

Regional military spokesman Lieutenant Colonel Jo-ar Herrera said Sunday the military was still checking the report.

"He (Hapilon) is not being heard or monitored commanding troops on the ground," Herrera said in Marawi.

Australia has sent two high-tech surveillance planes to help Filipino troops in Marawi, joining the United States in providing military assistance.

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