More than 100 people have been confirmed killed in the conflict, which began last week when gunmen waving black flags of the Islamic State (IS) group rampaged through the mostly Muslim-populated city of Marawi.
President Rodrigo Duterte declared martial law across the entire southern region of Mindanao, home to roughly 20 million people, in response to the crisis as he warned that local militant groups were uniting behind IS and becoming a major security threat.
But the militants, initially estimated by the nation's defence chief to number just 100, have withstood eight days of intense air assaults and street-to-street combat, prompting the government's threats on Tuesday.
"We call on the remaining terrorists to surrender while there is an opportunity," military spokesman Brigadier-General Restituto Padilla said in a statement.
"For the terrorists, not surrendering will mean their sure death."
Padilla also told AFP the surrender call warning was aimed at limiting the loss of more lives and property.
Up to 2,000 residents were trapped in areas held by the militants, according to the local government, and the International Committee of the Red Cross had voiced alarm they would be caught in the bombing raids or crossfire.
The militants also took a priest and up to 14 other people hostage at the start of the crisis, and their fate remains unknown.
The militants released a video in which they threatened to kill the hostages, according to a report by the SITE Intelligence Group on Monday that could not be verified.
And clashes on Tuesday appeared to be as intense as previous days, according to an AFP reporter who followed security forces who had to run from militants' sniper fire coming from nearby buildings.
Military helicopters fired rockets repeatedly on that part of the city Tuesday morning, and black smoke rose from the buildings that were apparently hit.
The gunmen were being backed by foreign fighters, including Malaysians, Indonesians and Singaporeans, authorities said.


