(Adds government statement) MANILA, April 16 (Reuters) - Muslim countries appealed to the Philippine government and local Islamic rebels on Monday to end a three-day battle that has killed 18 people, including a child, and displaced thousands. Professor Ekmeleddin Ihsanoglu, secretary general of the Organisation of the Islamic Conference (OIC), called on the Moro National Liberation Front (MNLF) and Manila to abide by a 1996 agreement that was meant to end conflict in the southern Philippines. Government troops dropped 250-pound bombs and fired rockets into the base of renegade MNLF commander Habier Malik near Panamao town on the southern island of Jolo over the weekend after he fired mortars on their headquarters on Friday, killing a child that lived nearby. Malik's fighters also killed two soldiers and wounded eight in an ambush, and mortar rounds were fired at a special forces' base, injuring six soldiers. Lieutenant-General Eugenio Cedo, commander of military forces in the southwest, said at least 12 rebels had been killed and fighting was continuing as troops hunted Malik and 100 of his followers in the jungles surrounding Panamao. Jesus Dureza, the government's peace adviser, said the military was targeting Malik and not the MNLF but he called on the armed forces to finish their offensive as soon as possible because of the threat of injury and death to locals. "We call on the armed forces of the Philippines, as it undertakes punitive action against Malik et al, to calibrate its actions and put a quick end to its efforts," Dureza said in a statement. Nearly 8,500 families evacuated their homes to avoid the gunfire and are sheltering in Jolo town, an official from the provincial disaster coordinating council said. The Philippines, a largely Catholic country, has been trying to quell Muslim separatism for decades and signed a peace deal with the MNLF in 1996 that was touted as the solution to a decades old conflict that has killed over 120,000 people. But the aerial bombardment and gunbattles will make it more difficult for the government, mainstream MNLF members and the OIC to salvage the 1996 deal when they meet in Jeddah in mid-July. The failure to implement the MNLF deal correctly has made negotiations for a separate peace with rival rebel group, the Moro Islamic Liberation Front (MILF), more difficult. Disappointment within the MNLF has also encouraged some of its members to help the Abu Sayyaf, the most hardline Muslim rebel group in the Philippines, and members of Jemaah Islamiah (JI), a regional terror network which uses Jolo as a base. The military believes Malik has sheltered Dulmatin and Umar Patek, members of JI who are suspected of planning the 2002 bombing on the Indonesian resort island of Bali that killed more than 200 people.
