"Right now, he is still inside (the city)", Gen. Eduardo Ano told The Associated Press. "I'm just praying that the bullets will not find its way to my house and hit us".
"Based on our intelligence, Isnilon Hapilon is still in the city", said Jo-Ar Herrera, spokesman for the First Infantry Regiment. "We want to finish this problem as soon as possible".
Special forces commandoes were deployed to drive out the remaining 20 to 30 Maute group rebels holed-up in Marawi but encountered heavy resistance on Friday.
Army officials said 13 fighters were killed Thursday by troops backed by rocket-firing helicopters in Marawi city, an important hub for the Islamic faith that now resembles a war zone.
Mr Duterte, addressing soldiers fighting the militants, said there is still a chance for peace.
Duterte said the fighters beheaded the local police chief after capturing him at a road checkpoint.
Snipers fired on Friday afternoon at about 100 troops who were marching single-file uphill through one district of Marawi that the militants had previously controlled, according to journalists accompanying the soldiers.
"Of course, our country needs modern weapons, we had orders in the United States, but now the situation there is not very smooth and in order to fight the Islamic State, with their units and factions, we need modern weapons", said Duterte.
What is wrong with the declaration of martial law in Mindanao when the Maute group did attack Marawi City with more than a hundred members, burned a school, the city jail and the Cathedral of Our Lady Help of Christians, and took hostages, including Fr. Chito Suganob, the parish church secretary, parish council president, and several parishioners?
Progressive groups trooped to Plaza Miranda to show opposition against President Duterte’s martial law
The ongoing violence has forced thousands to flee the city of Marawi, located about 816km south of the capital Manila. It was not immediately clear whether civilians were among the dead.
He pledged allegiance to the Islamic State group in 2014.
Following the declaration, Philippines military has ordered more than 200,000 people in the city of Marawi, Mindanao to leave their homes.
"We are using surgical airstrikes and calling on the residents to leave the villages where there are reported presence of terrorists", he said. But he added that the smaller groups "are working to really get that recognition and funds, of course".
Placing Mindanao under martial law empowers the Philippine military to supersede civilian authorities in enforcing the law.
Tuesday's emergency declaration of the military rule in Mindanao took immediate effect and will last for 60 days, according to Ernesto Abella, Duterte's spokesperson, said from Russian Federation, where Duterte was on a scheduled four-day official visit.
Washington has offered a $5 million reward for information leading to Hapilon's capture, but he has proved elusive. Once again, Hapilon escaped. He said jihadists from Malaysia, Indonesia and Singapore are fighting in Marawi.
Army tanks packed with soldiers rolled into a southern Philippine city Thursday as gun.
The southern Philippines has been troubled by decades-long Muslim separatist uprisings in the predominantly Catholic nation.
Duterte had repeatedly threatened to place the region under martial law, which allows him to use the armed forces to carry out arrests, searches and detentions more rapidly. But there are fears the expanded powers could further embolden a leader who already has been accused of allowing extrajudicial killings of thousands of people in his crackdown on illegal drugs.More news: Donald Trump departs Israel declaring that peace deal is possible