Among the fatalities were 5 soldiers and 2 policemen, who sought to flush out Maute and Abu Sayyaf bandits that torched and occupied several vital installations on Tuesday. Twenty-one state troops meanwhile were wounded, ABS-CBN's Chiara Zambrano reported.
Thirteen extremists meanwhile were killed in the skirmishes.
Authorities however have yet to confirm the number of slain civilians amid social media reports that the extremists allegedly singled out and killed several residents.
In an interview with ABS-CBN News, Armed Forces of the Philippines (AFP) Col. Edgar Arevalo said the military recovered the bodies of a police chief inspector, an ambulance driver, and a Maute bandit at the Amai Pakpak Medical Hospital (AMPH) on Wednesday.
Seventy-eight hospital workers and construction workers were rescued there, Arevalo said.
The AMPH was previously held by Maute and Abu Sayyaf, along with the Mindanao State University and the city hall, Arevalo said.
The official said they were still validating a report that terrorists snatched off a parish priest and about a dozen parishioners from St. Mary's Cathedral.
Intelligence units, he added, were also seeking confirmation on reports that the terrorists on Tuesday freed about a hundred inmates from the city jail.
Arevalo said rebel forces are still scattered throughout the city.
"May mga snipers pa sila na nasa tuktok ng structures natin diyan na na-o-occupy nila. Nag-lay rin po sila ng improvised explosive devices," he said.
The military has sent reinforcements to Marawi, but their arrival has been delayed as residents left the city in droves and choked up roads and checkpoints, Arevalo said.
Fifty-percent of reinforcements have entered the city as of Wednesday afternoon. Arevalo said their deployment is expected to be completed early Thursday.