Reports said the stand off began after some 10 prisoners at the high security Camp Bagong Diwa snatched weapons from their guards and started shooting, killing three guards and a prisoner.
They later claimed that they were holding at least a 100 hostages, and sought talks with the authorities. They also contacted a local radio station and demanded talks with two senior Muslim officials and local movie star Robin Padilla, a Muslim convert.
Crack anti-terrorist forces and the police have surrounded the prison, and threatened to storm the four-storey building unless the militants surrendered immediately.
"We're going to assault these people if they don't turn over their weapons," said police spokesman Leopoldo Bataoil.
The rioting prisoners were reportedly led by Alhamser Limbong and Kair Abdul Gapar, both accused of several cases of kidnapping and bomb attacks.
Police 129 of the more than 400 inmates in the prison were members of Abu Sayyaf, one of the four major Muslim rebel groups operating in the Philippines.
Suspected to have links with the Al Qaeda, the Abu Sayyaf has been labelled a terrorist outfit by both Manila and Washington.
Latest reports quoted Congressman Mujid Hadaman as saying government officials were prepared to agree to the prisoners' demands, which included not getting punished for the uprising, the speeding up of their trials, respect for their rights and the chance to talk to media.
