MANILA -- Islamic militants killed eight Philippine marines searching for a kidnapped Italian priest during a major gunbattle, and later beheaded four of them, the military said Wednesday.

The troops were ambushed on the southern island of Basilan by a joint force from the Philippines' main Islamic rebel group, the Moro Islamic Liberation Front (MILF), and the Al-Qaeda-linked Abu Sayyaf, said a marine spokesman.

File photo shows Philippine troops on patrol on the island of Basilan in the southern Philippines. [AFP]

Lieutenant Colonel Ariel Caculitan said nine marines were injured and six other soldiers were still missing after the eight-hour clash with around 300 rebels near the town of Tip-Tipo.

He said troops were checking reports that Italian priest Giancarlo Bossi, 57, had been spotted with his kidnappers in the region.

The headless bodies of the four soldiers were recovered early Wednesday by provincial authorities in Basilan and they have been turned over to the military, the marines said.

MILF spokesman Eid Kabalu acknowledged the group's fighters had a firefight with the military, but he denied Abu Sayyaf militants were involved and accused the troops of violating a ceasefire by entering an MILF area.

The 12,000-strong MILF is the country's main separatist rebel group and is currently engaged in peace talks with the government in Manila.

The Abu Sayyaf is an Al Qaeda-linked group of self-styled Islamic fighters blamed for the country's worst terrorist attacks and many kidnappings.

Bossi, of the Pontifical Institute for Foreign Missions (PIME), was seized by heavily armed men near his parish church in the southern Zamboanga peninsula on June 10.

The government had earlier said his kidnappers could either be Abu Sayyaf men or renegade members of the MILF. The MILF has denied any involvement in the abduction and initially helped in the hunt for Bossi's captors.

MILF spokesman Kabalu denied that Abu Sayyaf militants were involved in the clash, stressing that the MILF had long cut links to the group, which is known for mutilating its victims.

"The firefight was touched off because they entered our area without first coordinating with the MILF leadership as agreed upon in the peace talks," Kabalu told AFP by phone from his base in the southern Philippines.

"This is their fault because they intruded into our territory and our forces were alarmed and had to defend their positions," he said.

The provocation, he said, was a clear violation of a 2003 truce and would be brought up to a joint monitoring committee.

"The MILF is not involved in the Bossi kidnapping. This we say loud and clear," Kabalu said.

The PIME website Asianews said Tuesday it doubted that Abu Sayyaf militants were involved in the kidnapping. It said it was more likely he was being held by a criminal gang.