Australia's defence force said on Friday it will send two military surveillance aircraft to assist Philippine soldiers fighting Islamist militants, as the archipelago nation battles to regain control of its southern city of Marawi.

"The Government of the Philippines has accepted an Australian offer of two Australian Defence Force AP-3C Orion aircraft to provide surveillance support to the Armed Forces of the Philippines," said an emailed statement from Australian Defence Minister Marise Payne.

"The regional threat from terrorism, in particular from Daish and foreign fighters, is a direct threat to Australia and our interests," she said in the statement, referring to Islamic State by one of its Arab acronyms.

The seizure of Marawi five weeks ago by Islamist rebels and the security forces' dogged fight to regain control of it has claimed 369 lives already, according to official estimates.

It has also alarmed Southeast Asian nations which fear Islamic State -- on a backfoot in Iraq and Syria -- is trying to set up a stronghold in the Muslim south of the mainly Roman Catholic Philippines that could threaten the whole region.

Indonesian and Malaysian warships launched joint counterinsurgency manoeuvres with Philippine vessels in waters nearby.

The United States has deployed troops near the besieged city, although they are not fighting there, and also provided a P-3 surveillance plane to assist the Philippines in battle.

Australia's statement condemned the attack on Marawi, but gave no details about where the aircraft would be deployed.

This week Philippine forces made a renewed push to retake the city, aiming to clear it by the weekend Eid festival.

On Thursday, a Philippine military official said about 100 armed militants remain there, confined to an area of about 1 square kilometre. That figures is less than the estimated 400 or 500 fighters who seized the city on May 23.