Col. Ernesto de Guzman, chief of staff of the militarys Southern Command, said the captives were seen in the village of Mabahay and Mt. Ma-Allah in Talipao, an Abu Sayyaf stronghold.
However, troops were unable to catch up with the bandits who fled deeper into the jungle.
Maj. Gen. Narciso Abaya, commander of the massive military operation to rescue the Abu Sayyaf hostages, said troops found bloodstains indicating that the bandits suffered an undetermined number of casualties.
Abaya said soldiers clashed with about 15 bandits of Abu Sayyaf leader Ghalib Andang alias Commander Robot and his ally Mujib Susukan in sitio Lateh at about 1:30 p.m. It was not known if Andang and Susukan were in the group.
Two hours later, another military unit fought for about an hour with another band of about 30 terrorists in barangay Bata Punta, Abaya said.
At about 4 p.m. an Army patrol chanced upon 17 Abu Sayyaf gunmen in the village of Kalutam, Abaya added.
"The beleaguered Abu Sayyaf forces withdrew 15 minutes after sensing that some of their followers have been wounded," he said, adding that government forces suffered no casualties.
Military spokesman Brig. Gen. Generoso Senga said they hope to locate the bandits lairs with intelligence supplied by five Abu Sayyaf bandits who surrendered last weekend, all belonging to Andangs faction.
"We gathered a lot of information but we cannot disclose them," he told reporters, adding that they hope to gradually constrict the bandits hiding places.
"Based on the interrogation they confirmed that they are having difficulties," Senga said. "They are tired, they have low morale and most of them just want to forget everything."
Senga indicated that more Abu Sayyaf bandits would give up this week, but did not give details "so as not to jeopardize" the rescue operation. Andang has reportedly sent surrender feelers, Senga said.
Andang led the abduction of 21 tourists and Malaysian workers from a Malaysian diving report in April, sparking the hostage crisis. The bandits later snatched dozens more hostages.
Most of the hostages have been released after payment of more than $15 million in ransom by Libya and Malaysia.
Aside from three Malaysian resort workers and a Filipino dive instructor, the Abu Sayyaf is also holding an American, Jeffrey Schilling.
In a related development, two Malaysian businessmen have reportedly arrived in Zamboanga City to convince former presidential adviser Lee Peng Wee to negotiate for the freedom of the Malaysian hostages.
Lee was instrumental in negotiating the freedom of several other Malaysian hostages earlier in the crisis.
But Malaysian Ambassador Arshad Hussain said Kuala Lumpur had not authorized the two businessmen negotiate with the Abu Sayyaf.
"As far as I know, the government has not mandated any Malaysians to initiate any negotiations or get the assistance of anyone in the Philippines," he said.
Senga said, "Even if there are negotiations, operations will go on." With Paolo Romero, AFP, AP