Kidapawan City, Philippines - Philippine troops on Thursday recovered a homemade bomb planted near a public market in a southern province where days of fighting with Muslim separatist rebels have displaced nearly 160,000 people, the military said.

The device was found in a bag left near a garbage collection area of an old bus terminal in Kidapawan City in North Cotabato province, 930 kilometres south of Manila, which is near the wet section of the public market.

Major Armand Rico, a regional military spokesman, said the bomb was made with a 60-millimetre mortar shell packed with 2 kilograms of TNT explosive powder and a kilogram of nails and was attached to a mobile telephone that was to act as a detonator.

He said the bomb could have been planted by Moro Islamic Liberation Front (MILF) rebels in retaliation for the military's offensive to drive them from 15 villages they had occupied in North Cotabato.

Troops cleared the villages on Wednesday after days of fighting that killed 53 people, mostly MILF rebels. The hostilities also forced 159,123 residents to flee their homes and stay in evacuation centres in fear of being caught in the crossfire.

Troops were conducting "mopping operations to remove mines and explosives laid by the MILF rebels," said Lieutenant Colonel Ernesto Torres, an army spokesman.

"The troops already deployed explosive ordnance disposal teams to ensure the safe return of the residents," he said.

The hostilities in North Cotabato flared last week after the Supreme Court stopped the signing of a Muslim homeland deal between the MILF and the Philippine government, which would have expanded an existing six-province autonomous Muslim region.

Catholic politicians have alleged that the deal violated the constitution and would have ceded sovereignty over the southern Philippines to the rebels. They have urged the Supreme Court to declare the agreement unconstitutional. (dpa)