Suspected Abu Sayyaf rebels using grenade launchers raided a tourist island in the southern Philippines, killing two Filipinos and snatching a boat with two local crew, police said yesterday.

Three resort workers were wounded but none of the more than 100 foreign and local tourists was hurt in the shootout before midnight on Tuesday near Pearl Farm resort on Samal island, 960 km south of Manila, a police spokesman said.

The resort is owned by the family of Davao Congressman Antonio Floreindo. The two fatalities, both Filipinos, were a resort guard and a mechanic who were killed in an explosion when the raiders blew up two speed boats of the resort before they fled, officials said.

Pearl Farm employee Rolando Jara and security guard Jimmy Colam were killed while security guard Danilo Orbuda and boat operators Leopoldo Ybanes and Samuel Morales were seriously wounded when the fleeing rebels fired a rocket-propelled grenade.

Eight suspected Abu Sayyaf members aboard two motorised boats tried to get a boat from the resort, but resistance from a security guard triggered a gunfight. The attackers fired at the resort's floating restaurants, burned the structure along with the two speedboats moored beside it.

The attackers escaped toward the high seas of the Davao Gulf, near the island of Talikod where they commandeered a motorboat with two still unidentified civilians, as soon as one of their boats sank. Authorities have recovered a machinegun and ammunition from the sunken boat, which the attackers got from the resort. The resort's security was immediately beefed up.

Samal lies about 500 km east of Jolo, where the Abu Sayyaf operates. At the time of the raid, a total of 124 tourists were on the 11-hectare resort, including 49 Koreans, 23 Taiwan nationals, four Americans, two Australians, two Japanese and 44 Filipinos, the resort's spokesman Steven Tan said.

"They were sleeping at the time. They were alarmed and asked the front desk what the explosion was about," Tan said. Officials said that police and Navy units, including a gunboat, were scouring nearby islands for the attackers.

The suspected attackers were last seen in Malita coastal town, about 70 km from the resort, police said. The shootout occurred a little over a year after the Aby Sayyaf seized dozens of foreigners and Filipinos from nearby Malaysian tourist resorts and from the southern Philippine island of Jolo, sparking a months-long hostage crisis that damaged investor confidence in the Philippines.

"Based on evidence we gathered, they belonged to Muslim separatist groups," Captain Michael John Dubria said. Dubria said some time before the raid, guerrillas of the Moro Islamic Liberation Front (MILF) sent a letter to resort owners demanding extortion money but they had refused to pay.