ZAMBOANGA, Philippines - More than a hundred people who were held hostage by the rebels waging deadly street battles with Philippine troops escaped Tuesday amid a military offensive in which dozens of guerrillas were killed.

Ninety-nine people have died and 90,000 residents displaced since the standoff in the southern city of Zamboanga began on Monday last week, when hundreds of Moro National Liberation Front (MNLF) gunmen invaded in a bid to derail peace talks. Hundreds of other civilians had remained trapped as the rebels sought shelter from a military assault in Muslim neighbourhoods of the city, with some of the residents used as hostages or human shields. After a relentless military offensive involving helicopter rocket attacks and intense street fighting, 149 people escaped on Monday night and Tuesday morning from the MNLF, authorities said. The shell-shocked men, women and children were tearfully reunited away from the frontlines with their relatives, who had waited in anguish for days.

“I couldn’t sleep, I couldn’t eat, all I thought about was my little boy and my family,” said a 28-year-old hotel employee as he and his rescued family members embraced tightly.

“My son, my father and mother, cousins and nephews were taken hostage... it was nearly too much to bear.”

The man, who did not want his name published for security reasons left Zamboanga three months ago with his wife to work in the United States but returned when they learnt their relatives had been taken hostage.

Military spokesman Lieutenant Colonel Ramon Zagala said the rebels had been swept out of 70 percent of neighbourhoods they had initially controlled and reduced to a few dozen fighters, down from an estimated 200 when the conflict began.

“They (the rebels) have nearly run out of bullets. They are practically defeated,” Zagala told AFP.

In one of the biggest victories, Zagala said 123 hostages had been freed in a battle with rebels on Tuesday morning that left three soldiers dead.

Thirty rebels had been killed over the past 24 hours, according to Zagala. This brought the total number of MNLF fatalities to 86, with nine security forces and four civilians also killed.

But Zagala acknowledged that the rebels remained a threat, as they hid in homes and possibly continued to hold civilians as hostages.

“This is not yet over... there are still pockets of resistance,” he said, noting that the rebels were also occupying key areas in which they could shoot down at advancing troops.

In one confusing distraction to the conflict, the national police spokesman reported that the city’s police chief Senior Superintendent Chiquito Malayo was kidnapped on Tuesday morning.

However Interior Secretary Mar Roxas later sent a text message to the media saying Malayo had returned from MNLF territory having convinced 23 rebels to “come into the fold of the law”.

The national police spokesman who initially reported the alleged abduction, Senior Superintendent Reuben Sindac, was not available for immediate comment to clarify.

Muslim rebels have been fighting since the 1970s for an independent or autonomous homeland in the south of the mainly Catholic Philippines. An estimated 150,000 people have died in the conflict.

The MNLF signed a peace treaty in 1996 that granted limited self-rule to the south’s Muslim minority, and has since largely participated in the country’s political process rather than foment violence.

But 71-year-old MNLF founder Nur Misuari has been angered by a planned peace deal between the Moro Islamic Liberation Front (MILF), a rival group with 12,000 gunmen, as he believes it would sideline his organisation.

He deployed his gunmen to Zamboanga to plant an independence flag and, according to security analysts, show the MNLF could prove a major threat if it continued to feel ignored.

President Benigno Aquino has described the autonomous region established under the 1996 pact with the MNLF as a “failed experiment”, largely because the southern Philippines has continued to endure dire poverty and corruption.

Under the envisaged new peace deal, a new autonomous region would replace the MNLF-brokered one.

The rival MILF would have most control of the new autonomous region and the potential riches on offer if large mineral deposits and the area’s fertile farming regions are exploited.