Nigeria's main militant group says it is prepared to unleash a new wave of violence in the volatile Niger Delta following the expiration of its deadline for the evacuation of all oil workers. Soldiers clashed with militants early Saturday during an operation to rescue 10 hostages aboard a ship seized by the militants.

The main rebel Movement for the Emancipation of the Niger Delta, or MEND, has declared "all-out war" in the restive delta while the military has vowed to "flush out" armed criminals from the region. Analysts say the stage is set for a bloody showdown even as casualty figures are said to be mounting.

The United Niger Delta Energy Development and Security Strategy, one of the region's pressure groups, says the escalating violence and killings are regrettable. Tony Uranta speaks for the group.

"We are saddened at these losses because both the military personnel and armed youths are Nigerians," he said. "The fact that we have created a monster that is devouring Nigerians, Nigerian youths is very scary."

The rebels have asked foreign oil producers to pull out of the region by midnight Friday or risk being caught up in increasing violence. In the past three years MEND has been behind a series of kidnappings of oil workers and attacks on oil installations.

Uranta, who was a member of a presidential committee on the Niger Delta last year, blames the military for the current clashes.

"It is clear that if there had been provocations, there had been more provocations by the military authorities than by these young men and women," said Uranta. "We do not support any attack on oil or any installations, nor do we support any taking of hostages. But the truth must be told. These young men and women have not really attacked without provocation in recent times."

The military rejects any wrongdoing and says its operations in the Niger Delta were informed by national security considerations.

The Niger Delta, which produces all of the OPEC member nation's crude oil, has a long history of militants attacks on oil facilities and its workers.  The attacks have often been followed by army raids on villages in the creeks.

Violence in the delta is rooted in poverty, corruption and lawlessness. Most inhabitants have seen few benefits from five decades of oil extraction that has damaged their environment.

The world's eighth largest oil exporter is already suffering huge losses because of violence in the delta.