A cease-fire has been forged between the Philippine army and the separatist Moro National Liberation Front, state media reported on Friday, citing Vice President Jejomar Binay.
He made the announcement during an interview.
The truce, which was to take effect at midnight, effectively ended five days of fighting that left people dead and wounded. The army and the militants were locked in a tense standoff in southern Zamboanga City.
Binay said Defense Secretary Voltaire Gazmin and MNLF founding chair Nur Misuari informed him of the cease-fire.
Binay said that he will fly to the city on Saturday to help in the peace arrangements.
Days of unrest
The unrest has fueled fears of increased instability in a region where the central government is pursuing a new peace plan after decades of violence.
The crisis in Zamboanga City began when large numbers of rebels from the Muslim militant group came ashore at the start of the week.
The outbreaks of violence have killed 11 rebels, five members of the security forces and two civilians, Brig. Gen. Domingo Tutaan, a spokesman for the Philippine military said Friday.
Dozens of others have been wounded, he said.
Authorities estimated about 180 rebels are holding roughly 170 hostages in six districts. Security forces blockaded affected areas, and the two sides have sporadically exchanged gunfire over the past five days.
Speaking Friday at the Armed Forces of the Philippines' headquarters in Zamboanga City, President Benigno Aquino III warned rebel hostage-takers that they face the use of force if they further threaten civilians.
"There are limits, if there is an increased threat to the safety to innocent civilians," Aquino said. "There are lines that they cannot cross. If they cross those lines, we will be obligated to use the state's force against them."
Some hostages have managed to escape, and about 20 rebels have been detained, authorities said.
Thousands of people have been evacuated from the rebel-held districts in Zamboanga, a city of about 800,000 on the southwestern tip of the island of Mindanao.
The MNLF, a separatist movement founded in 1971 by Misuari with the aim of establishing an autonomous region for Muslims in the mainly Catholic Philippines, signed a peace deal with the central government in Manila in 1996. But some of its members have broken away to continue a violent campaign.
Last month, Misuari issued a "declaration of independence" for the Moro nation -- referring to Mindanao's indigenous Muslim population -- after complaining that the MNLF had been left out of a recent wealth-sharing agreement with another insurgent group, the Moro Islamic Liberation Front, which has fought for decades to set up an independent Islamic state on resource-rich Mindanao.
Under the agreement signed this year, Muslims will get a 75% share of income derived from the exploitation of metallic minerals in the area -- reported to include gold and copper.
Aquino wants to achieve a lasting peace in the region by 2016, when his term ends.
Agreements have yet to be reached on power-sharing and normalization, which means giving up arms. A report published last year by the International Crisis Group warned that the peace process needed to find ways to support insurgents as they build normal, civilian lives.