MANILA, Aug 18 (Reuters) - The Philippine military lost 13 soldiers and killed at least two members of the Muslim rebel group Abu Sayyaf in its first offensive against militants suspected of beheading 10 comrades last month.

Fighting was continuing on Basilan, a remote southern island where troops raided an Abu Sayyaf camp at dawn on Saturday.

A military spokesman said the military was trying to confirm reports that up to 30 rebels had been killed or wounded in the battle.

"The armed forces will press the fight," said Lieutenant-Colonel Bartolome Bacarro.

Nine soldiers were injured in the clash.

Two members of Abu Sayyaf were confirmed dead and Bacarro said one of them was involved in the beheadings on Basilan on July 10.

Manila has blamed the Abu Sayyaf, which has links to regional militant network Jemaah Islamiah, and renegade members of the more mainstream Moro Islamic Liberation Front (MILF) for the mutilations.

This was the first military offensive on Basilan since July 10 despite President Gloria Macapagal Arroyo deploying thousands of troops to hunt the killers. The government has been anxious not to launch an all-out attack for fear of pulling the MILF, which has camps on the island, into the fighting.

The MILF has admitted ambushing marines in July for entering their territory unannounced but has denied decapitating the men.

Bacarro said the military had coordinated Saturday's raid with the MILF.

The largely Catholic central government wants to seal a peace deal with the MILF to end a decades-old conflict that has killed over 120,000 people and stunted development in one of the most resource-rich areas of the indebted country.

Talks between the government and the MILF have been stalled for nearly a year over the size and wealth of a proposed ancestral homeland for Muslims but negotiations are set to resume next week in Malaysia.

The prospect of a deal has stoked unrest in other parts of the south, where members of rival group the Moro National Liberation Front (MNLF) have clashed with soldiers amid frustration that their own 1996 agreement with the government has not been properly implemented.

While the government wants peace with the MILF and MNLF it has vowed to destroy the Abu Sayyaf, which is notorious for beheadings, kidnappings and the bombing of a ferry in Manila in 2004 that killed over 100 people.

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