* Planes deployed for air assault on rebel positions
* Army says militants boxed in, urges surrender
* Martial law needed to contain IS threat - lawmakers
* Militants have food, bullets to keep up fight
By Tom Allard
MARAWI, Philippines, May 31 (Reuters) - A week-long assault by Islamist rebels in a southern Philippine city is being fuelled with stolen weapons and ammunition and fighters broken out of jails, the military said on Wednesday, as troops battled militants resisting ground and air attacks.
The pro-Islamic State Maute group has proven to be a fierce enemy, clinging on to the heart of Marawi City through days of air strikes on what the military called known rebel targets, defying expectations of a swift end to their occupation.
The military on Wednesday deployed for the first time SF-260 close air support planes to back attack helicopters and ground troops looking to box rebels into a downtown area. The rebels hold about a tenth of the city, the army said.
Military spokesman Restituto Padilla said the hardline Maute had kept up the fight with rifles and ammunition stolen from a police station, a prison, and an armoured police vehicle.
"They were able to get an armoured vehicle of the police," Padilla added. "Inside, there is a supply of bullets," he said, adding that the ammunition was among the stolen items the rebels were using to resist the forces being poured into the area.
The militants, who freed jailed comrades to join the battle, opted for urban warfare because arms were available in the city and homes and shops provided ample supplies of food, Padilla said.
"Yes indeed, there was planning involved," he added.
The military has from the outset insisted it has control of the situation, but the slow pace of efforts to retake Marawi has prompted questions about its strategy.
That has been compounded by social media images of smiling fighters with assault rifles posing on an armoured, U.S.-made police combat vehicle, dressed in black and wearing headbands typical of Islamic State.
Another picture showed a bearded man at the wheel of a police van flying an Islamic State flag. The authenticity of the images has not been independently verified and the military has urged the public not to spread "propaganda".
The Philippine government has been alarmed by the strength of the Maute and intelligence reports suggesting it has teamed up with other extremist groups and has recruited foreign fighters.
President Rodrigo Duterte has declared martial law on Mindanao island where Marawi is located, in a move to crush a movement he is now calling an Islamic State invasion.
The military believe the Maute and its associates staged the Marawi takeover to try to win Islamic State's endorsement as its affiliate in Southeast Asia.
Eighty-nine militants, 21 security forces and 19 civilians were killed in the unrest, which security experts say is a sign extremists in the southern Philippines are now better organised and funded, pointing to the Maute's rapid rise from obscurity.
In back-channel talks with the militants, the remaining fighters had been urged to give up, Padilla said.
"We are appealing to these armed men to come to their senses, lay down their weapons and surrender," he said.
The government on Wednesday said one Mindanao separatist group, which had struck a yet-to-be-implemented peace deal with it, had agreed to help the military get civilians, dead or alive, out of Marawi.
The Moro Islamic Liberation Front (MILF) has accepted Duterte's unconventional offer for communist and separatist rebel groups to unite to stop the spread of radical Islam in the southern Philippines.
Congress held a special hearing on martial law, which minority bloc lawmakers called an overreaction by Duterte, made during an overseas trip, and without consulting security agencies.
His decision has broad support in the legislature, with some backers urging tough measures to defeat the enemy.
"With the military is now admitting ISIS is in the Philippines we have a serious problem," said congressman Harry Roque, who filed a resolution supporting martial law.
"ISIS is not a small problem, it is a very big problem."
Additional reporting by Neil Jerome Morales, Karen Lema and Manuel Mogato in MANILA; Writing and additional reporting by Martin Petty; Editing by Clarence Fernandez