A bus packed with passengers caught fire today in the southwestern Philippines, killing five people, including three children, police said.

As the Philippines Government stepped up its battle with Muslim rebel hostage-takers today, the military said it found two bodies in guerrilla territory, but neither belonged to the American captive the insurgents claim to have beheaded.

A Muslim extremist group that snatched 20 people, including three Americans, from an island resort in the Philippines threatened today to kill all the hostages if the military moves attempt to rescue them.