Twelve followers of a self-described Philippine Sultan died in a shootout with Malaysian security forces on Friday, police said, as tensions ratcheted up in their 17-day stand-off.
Hamza Taib, police chief of the Malaysian state of Sabah, also said two security personnel were killed and that the stand-off with the Filipino intruders continued, contradicting earlier official statements suggesting it was over.
Malaysian Prime Minister Najib Razak expressed regret over the bloodshed but said he had authorised police and armed forces to take whatever action necessary to end the impasse.
“I am very sad over the incident because what we had wanted to prevent, which is bloodshed, had actually happened,” he said.
The two Southeast Asian neighbours were caught by surprised on February 12 when dozens of followers of the little-known sultan of Sulu sailed from their remote Philippine islands to press the sultan’s claim to Sabah, which is on Borneo island. 
Jamalul Kiram III, 74, says he is heir to the Islamic Sultanate of Sulu, which once controlled parts of Borneo, as well as southern Philippine islands.
Hamza said the shoot-out was sparked when the intruders, who have been estimated variously at between 100 to 300 people, fired on Friday at security forces as they were tightening their cordon in a remote corner of Sabah.
“The intruders fired at us, then we returned fire,” he said.
“As a result of the fire two of my men died, three were injured and... 12 intruders died.”
“The operation is still going on,” he said, adding that police continued to surround the area where about 100 people were left.
Malaysia’s state news agency Bernama reported earlier that two police commandos had been killed in a mortar shell explosion as they patrolled around the village where the gunmen were holed up.
Kiram’s spokesman Abraham Idjirani had earlier claimed that Malaysian snipers had killed 10 of the sultan’s men and wounded four other members of the group.
However, Malaysian officials initially denied that any deaths had occurred.
The leader of the invaders, Raja Muda Agbimuddin Kiram, a brother of the self-proclaimed sultan, avoided capture in the shootout and remains in Sabah with his men to continue the fight, Idjirani added.
“This is just the beginning,” he warned.
Philippine President Benigno Aquino’s office expressed regret over the deaths.
“We deeply regret the loss of life,” Aquino’s spokesman Ricky Carandang said in a short statement.
“Our priority since this began was to resolve this peacefully. We have maintained that this action of the Kirams was not the correct way to assert their claims.”
Earlier, Philippine foreign department spokesman Raul Hernandez said he was told by Malaysia’s ambassador that the confrontation had ended with the shootout.
Hernandez said Manila had formally demanded a full account of the shootout as well as access to any detained Filipinos.
The Islamic Sultanate of Sulu leased northern Borneo to Europeans in the 1870s.
While the sultanate’s authority gradually faded as Western colonial powers exerted their influence over the region, it continued to receive lease payments for Sabah.
The former British colony became part of the federation of Malaysia when it was formed in 1963.
Kiram and the other heirs of the sultan still receive nominal annual compensation from Malaysia – the equivalent of about US$1,700.
Idjirani suggested last week that the men would stand down if the compensation was substantially raised.