Philippine troops on Monday retook several southern towns where Muslim rebels burned houses and shot or hacked to death at least 26 people earlier in the day in what the guerrillas said was an outburst of frustration with an uncertain peace process.

The retreating Moro Islamic Liberation Front rebels took dozens of civilians hostage in Kolambugan town as a human shield, said Brig. Gen. Antonio Supnet, head of an army brigade that drove away the rebels.

Officials said 23 civilians were killed in Kauswagan and in neighboring Kolambugan, including villagers who were taken hostage, a group of farmers and two bus passengers who were hit by rebel gunfire. At least three soldiers were killed, army commanders said.

Supnet said more than 20 houses were burned in Kauswagan alone and hundreds of displaced villagers were streaming into evacuation centers in nearby Iligan city.

William Sechico, 14, from Kolambugan, said he and his five siblings and parents were asleep when their house came under fire.

"My father died," he said. "We hid in the bushes at the back of our house until 1 p.m. today."

Military chief Gen. Alexander Yano said government troops launched an offensive in response to Monday morning's attack by about 300 guerrillas on the coastal towns in Lanao del Norte province.

TV footage showed mayhem in one smoldering village as residents ran for cover, jumping over the fences of their roadside houses. Burned-out vehicles littered the street. A photographer said up to 100 people escaped in dozens of boats to Iligan because the main highway was blocked.

Michael Enat, manager of Cosmopolitan funeral homes in Iligan, said an army truck brought the bodies of nine civilians from Kauswagan who had been shot and hacked to death.

The escalation of fighting on Mindanao island came amid uncertainty over a fragile peace process after the Supreme Court blocked a preliminary agreement with Muslim rebels calling for an expanded autonomous region.

A military offensive earlier this month that dislodged the rebels from several villages displaced about 80,000 residents in a nearby province.

At least 7,000 villagers fled in the latest fighting, police said.

Rebel spokesman Eid Kabalu confirmed the attack, but said it was carried out by a key commander, Abdullah Macapaar, also known as Bravo, without the knowledge of the group's leadership.

Kabalu said the rebels were frustrated over the slow progress in talks but added their actions were "illegal and they were ordered by (rebel) leaders to vacate the areas they attacked."

President Gloria Macapagal Arroyo told the rebels in a televised statement to withdraw immediately or they would be crushed. She convened an emergency meeting of the National Security Council to discuss the rise in rebel attacks.

"This is not just a violation of the peace agreement, but also a challenge to the overall aspirations of the people for peace and progress in the whole island of Mindanao," she said, calling the attacks "sneaky and treacherous."

Retired Gen. Rodolfo Garcia, head of the government's negotiating team with the rebels, called the attack on the towns a violation of a 2003 cease-fire.

On Sunday, rebel forces attacked a four-vehicle army convoy near Mulondo township in Lanao del Sur province, killing four soldiers and four militiamen, the military said. Kabalu confirmed the attack but said he was not yet sure what triggered it.

Officials in predominantly Christian cities in the southern Philippines — the traditional homeland of minority Muslims — have strongly opposed the accord on an expanded Muslim autonomous region, part of efforts by the government and the rebels to end a decades-old insurgency for Muslim self-rule in the predominantly Roman Catholic nation.

The agreement, which was supposed to be signed this month but was blocked by the Supreme Court, calls for more than 700 new villages to be added to an existing Muslim autonomous region, subject to the approval of residents in a plebiscite next year.

The Supreme Court acted on a petition filed by Christian politicians wary of losing land and power to Muslims.

Garcia and rebel leaders have warned that many of the younger, more radical guerrilla commanders such as Bravo may have given up on negotiations.