MANILA, Feb 4 (Reuters) - At least five people were killed on a remote island in the southern Philippines on Monday when U.S.-trained troops clashed with Islamic militants holding two people hostage, an army spokesman said.

Major Eugene Batara said troops were on a mission to rescue the two hostages, including the daughter of a wealthy local trader, when they clashed with the Abu Sayyaf rebels on the island of Jolo.

"We lost two men but we killed three on their side," Batara said, adding five soldiers were also wounded in the hour-long gunbattle.

"Our troops recovered an assault rifle and the bodies of three dead rebels. Our wounded have been airlifted to a trauma unit facility on Jolo town."

There was no immediate word on the hostages.

The Abu Sayyaf, one of the most deadliest Muslim militant groups in Southeast Asia, is known for kidnapping-for-ransom and was blamed for the country's worst terror attack, a 2004 ferry bombing that killed 100 people.

Since 2002, Washington has sent elite military units to help train and advise local soldiers in the south of the archipelago, including on Jolo.

On Feb. 18, about 6,000 U.S. soldiers will hold conventional and anti-terrorism drills with 2,000 Filipino troops during the two-week annual Balikatan (shoulder-to-shoulder) exercises in several areas in the country, including on Jolo. (Reporting by Manny Mogato, editing Raju Gopalakrishnan and Sanjeev Miglani

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