MANILA, Philippines -- (UPDATE 5) The military said at least eight combatants have been killed and 12 others wounded as an assault to dislodge Moro rebels who occupied 15 villages in five North Cotabato towns entered its second day Monday.

The Moro Islamic Liberation Front.(MILF), for its part, said it might reinforce its embattled forces in the Mindanao province as it denied reports that the guerrillas facing the government assault belonged to a “lost command.”

The joint Coordinating Committee on the Cessation of Hostilities (CCCH) also met on Monday to continue efforts to find a peaceful solution to the North Cotabato clashes.

"We met to discuss how to resolve the problem peacefully. There are some things that need to be ironed out," said Brigadier General Reynaldo Sealana, co-chairman for the government of the CCCH, in a phone interview.

Interior Secretary Ronaldo Puno acknowledged the situation in North Cotabato has worsened as he lamented the government’s failure so far to return thousands of families who have fled the fighting to their homes.

The fighting has displaced 18,633 families or 129,000 people in the affected areas, according to the Office of Civil Defense.

"The bottom line is we were not able to return families in areas where they [MILF] supposedly have withdrawn. It is impossible to return residents to their homes, and the number of affected families even increased," said Puno.

As of early Monday evening, two of the villages occupied by the rebels in the towns of Aleosan, Midsayap, Pikit, Libungan, and Pigkawayan, had been cleared, Armed Forces of the Philippines (AFP) vice chief of staff Lieutenant General Cardozo Luna, who is overseeing the operations, said.

However, the rebels, led by MILF commander Umbra Kato, have stood their ground and been putting up heavy resistance, despite being pounded by artillery and air strikes.

"We are conducting air strikes, close air support for our ground forces. They are inching towards the different barangay [villages]," Luna said in a phone interview from Maguindanao.

MILF civil military affairs chief Eid Kabalu denied government and military claims that Kato’s forces were a “lost command” that the rebel leadership had lost control over.

"It is not a lost command,” Kabalu said. “Umbra Kato is a legitimate commander of the MILF who heads the 105th Base Command… It is not correct to say that they are not following orders."

Asked if the MILF would reinforce Kato’s men, Kabalu replied: "That's a possibility."

"We're watching the situation carefully right now," he said, adding that the forces under Kato’s command "are fighting back right now, they are fighting back."

Kabalu maintained that government militiamen had attacked Kato’s men as they were complying with MILF orders to "reposition" or pull themselves out of North Cotabato on Friday.

"Law enforcement operations will not cease, until the five towns are cleared," Defense Secretary Gilberto Teodoro Jr. told a joint news conference by the military and police leadership in Camp Crame.

"We believe that there will be no escalation. The breaking of the law is isolated, limited to one base command. [The rest of the MILF] respect authority and conscious of peace process," Puno said.

Sealana said he was awaiting feedback from his MILF counterparts, who have consulted their leaders.

"There are proposals, but we are not ready to expose it to the public. Measures are being cooked up and these are good measures," said Kabalu. "There is still hope for us to salvage the situation in North Cotabato."

Luna confirmed one soldier was killed and, while the remains of only one MILF fatality was recovered, he said the military has received reports six others have been killed in the fighting.

On the other hand, AFP deputy chief of staff, Lieutenant General Rodrigo Maclang, said the bodies of two rebels were recovered "but [the military] has information that there are also heavy casualties on their [MILF] side."

Kabalu confirmed three MILF fighters killed on Sunday, and another one on Monday, with three more wounded.

There was no word yet on possible casualties from air raids. Kabalu said two MG-520 attack helicopters and two OV-10 Broncos attacked their forces in Aleosan town.

A senior Air officer, asking not to be named because of the sensitive nature of the information, said lateMonday afternoon that the Broncos reported “target hit” during bombing and strafing runs.

However, he acknowledged that, as of posting time, there had yet to be “an official report of casualties and damage incurred by the enemies.”

The air strikes began Sunday with a total of six planes -- two Broncos, two SF-260s, and two MG-520s.

On Monday, the 15th Strike Wing at Sangley Point, Cavite, sent two more OV-10s while the 205th Tactical Helicopter Wing in Mactan sent two night-capable UH-1H choppers to augment the four Hueys already in North Cotabato.

The night-capable Hueys are not equipped for bombing missions but may undertake night-time troop transport, evacuation, supply and reconnaissance.

"They [MILF] are resisting heavily…They would like to make it firm that they should be in those lands," Luna said.

In Midsayap town, Lieutenant Colonel Diosdado Carreon, the chief of the 40th Infantry Battalion, said he expects the MILF guerrillas "to stand their ground for while" in Balike village.

Carreon, in a phone interview, said Army troops continue to exchange gunfire with the rebels and have also fired mortars at MILF positions.

Some 13,000 of the displaced families, from the towns of Aleosan, Libungan, Pikit, Midsayap, and Pigkawayan, are in 43 evacuation centers, while the rest sought refuge in relatives' houses, OCD Administrator Glen Rabonza said.

"We have sufficient stocks of basic necessities for the evacuees," Teodoro said, adding "logistical planning" was underway to ensure a steady supply of relief supplies.