Bangkok: Philippine troops are planning a final assault to end the almost 100-day battle of Marawi, as Islamic State-allied fighters try to sneak into the besieged southern Philippine city.

More than a dozen armed militants have been killed in firefights with soldiers in recent days as they attempted to cross  the city's Lake Lanao under the cover of darkness.

It is not known how many have managed to reach the 40 or so heavily-armed militants still holed up in the city centre with hostages.

Militants have also attacked residents in the nearby town of Marantao in what analysts say appears to be a ploy to divert military attention from Marawi.

Experts say the battle for Marawi has attracted would be jihadists from neighbouring countries like Indonesia and Malaysia, as well as the Middle East.

Dozens of fighters from Iraq and Syria have been among almost 600 militants killed since the city was besieged on May 23.

Prime Minister Malcolm Turnbull last week warned that Marawi could become south-east Asia's Raqqa – referring to Islamic State's self-proclaimed capital in Syria.

Islamic State is believed to want to establish a foothold in south-east Asia as it suffers setbacks in the Middle East.

But Philippine military Chief of Staff Eduardo Ano told reporters the military is confident of retaking the country's largest Muslim city after "one big battle" in the coming days.

He didn't give details.

The militants are now confined to a cluster of small, mosque-dotted communities which have been heavily damaged by airstrikes and artillery.

The advance of the troops has been slowed by rooftop snipers and booby-trapped buildings. 

Several dozen hostages, including a Catholic priest, are being used as human shields.

The death toll in the city is estimated at more than 760 people.

Some of the city's 300,000 residents have returned to neighbourhoods considered safe by the military and classes at the main Mindanao State University have reopened.

But as much as 90 per cent of the city has been destroyed.

Foreign Minister Julie Bishop said on Tuesday that Australia is prepared to send troops to train and advise counterparts in the Philippines. Similar offers have been made by other regional countries.

US special forces have been deployed to Marawi to backup troops fighting there. They have been seen flying drones over the city.

Australia is already flying two P-3 Orion surveillance planes over Marawi to gather intelligence to help the ground battle.

But Philippine President Rodrigo Duterte, a fiercely nationalistic firebrand, has expressed concerns about his country relying on foreign military assistance.