MANILA, Philippines (AP) _ About 200 Muslim rebels were holding nearly 300 people hostage Monday after clashing with government troops and rampaging through coastal communities in the southern Philippines, leaving at least eight people dead, officials said.

   The fighting occurred after troops backed by tanks blocked the Moro National Liberation Front guerrillas _ armed with assault rifles and grenade launchers _ from marching into Zamboanga city, a major port city, to raise their flag at city hall, military spokesman Lt. Col. Ramon Zagala said.

  He said the rebels were boxed into a Muslim coastal slum called Rio Hondo and were refusing to negotiate with security forces.

   Zamboanga Mayor Maria Isabelle Climaco said sporadic gunbattles killed a navy special forces member, a policeman and four civilians, and that 24 civilians, rebels and soldiers were wounded. The military said at least two guerrillas were killed.

   ``Everything is being done to solve the crisis as soon as possible with minimal damage to lives and properties,'' Climaco said.

   The military and police initially reported 20 residents were being held hostage by the rebels but Zagala said later Monday that up to 290 people were being held captive in three villages near Rio Hondo based on reports by government forces.

   Alberto Sumalpong Jr. said he and his family were awakened by blasts of gunfire and then fled to safety from their village, but he later returned to check on their belongings. ``Some villagers returned to check on their houses but ended up also being taken hostage,'' he told The Associated Press by telephone.

   Zagala said the rebels planned to march into Zamboanga, a bustling port city of nearly 1 million people, and hoist their flag at city hall but government forces discovered the plan three days ago and took defensive positions.

   ``We cannot allow another armed force to march around our cities. That is unacceptable,'' he said.

   TV footage showed troops and police in battle gear taking cover behind buildings as residents fled with bags of clothes. Troops secured a hospital, and most stores, businesses and schools in the city were shut.

   The rebels demanded that troops move an army tank farther away and remove snipers from the top of buildings, warning they would kill a hostage if they were harmed. They also wanted a shelter for their hostages by nightfall and said they would otherwise drag them to an undisclosed location, Jimmy Villaflores, an officer of the rebel-held Sta. Catalina village, told radio DZBB.

   The violence is the latest flare-up of Muslim unrest that has plagued the country's poverty-stricken Mindanao region on and off for decades. It shatters years of relative calm in Zamboanga city, a predominantly Christian region 860 kilometers (540 miles) south of Manila.

   The Moro group signed a 1996 peace accord with the government, but hundreds of its fighters held on to their arms and have accused officials of reneging on a promise to develop an autonomous region for minority Muslims in the south of the predominantly Roman Catholic country.

   The group later split into factions and faded into the background as its largest breakaway bloc, the Moro Islamic Liberation Front, gained strength and continued fighting.

   The 11,000-strong Moro Islamic Liberation Front has engaged the Philippine government in Malaysian-brokered peace talks, which have progressed recently toward a new Muslim autonomy deal. But a Moro National Liberation Front guerrilla faction led by Nur Misuari felt left out and has issued new threats.

   The trouble in Zamboanga city began late Sunday when police arrested five Moro National Liberation Front guerrillas who were wearing combat uniforms and carrying pistols in Rio Hondo, the military said.

   Then a navy patrol spotted a large boat and eight smaller vessels carrying dozens of armed guerrillas off Rio Hondo, sparking a gunbattle at sea that killed a member of the navy special forces and wounded six others, Zagala said.

   The clash spilled into Rio Hondo, where bursts of gunfire forced hundreds of residents to flee.

   Reinforcement troops and police were deployed to cut off the guerrillas.