ZAMBOANGA CITY, Philippines - A week of violence in the southern Philippines has undercut hopes of lasting peace in the resource-rich region and exposed the government to criticism for underestimating rogue Muslim rebels who feel ignored by a landmark deal last year.
The agreement signed by President Benigno Aquino and the biggest Muslim rebel group last October was meant to pave the way for a revival of southernmost Mindanao island after 40 years of conflict, giving Muslims there more autonomy in the Catholic-majority country.
That deal, with the Moro Islamic Liberation Front (MILF), remains on track, but the assault on the commercial hub of Zamboanga City by hundreds of armed rebels has underlined fears that the region's volatile mix of guns, clans and disgruntled rebel factions could yet derail the process.
The army said 61 people, including 51 members of the breakaway faction of the Moro National Liberation Front (MNLF), had been killed in the fighting, now in its seventh day. Ninety people have been wounded.
Aquino, who visited the city on Friday to face one of the biggest security crises of his three-year rule, must decide whether to crack down on the group - risking spreading violence - or open talks that could complicate the peace process.
A brief ceasefire collapsed on Saturday and troops were still battling rebels in Zamboanga, a port that is home to 800,000 people, and the nearby island of Basilan on Sunday, forcing thousands to flee.
The violence has paralysed the port, shutting banks and businesses, setting around 300 houses on fire and grounding flights. The rebels made their surprise attack on Monday, trying to march through the city to plant a flag of independence.
"There's only one word to describe what is happening in the city - catastrophic," said Cholo Soliven, president of the Zamboanga City Chamber of Commerce and Industry. "We are losing a lot, our economy is bleeding."