LAHAD DATU, Malaysia: Malaysia threatened Saturday to take "drastic action" against intruding followers of a self-proclaimed Filipino sultan after a tense standoff erupted into a shootout that killed 14 people.

Twelve followers of the little-known sultan of Sulu and two Malaysian security personnel were killed in Friday's firefight, police said, as the more than two-week-old siege in a remote corner of Malaysia turned deadly.

Dozens of Filipinos have been holed up on Borneo island, surrounded by a massive Malaysian police and military cordon, since landing by boat from their nearby Philippine islands to insist the area belongs to their Islamic leader.

"We want them to surrender immediately. If they don't, they will face drastic action," Hamza Taib, police chief of the Malaysian state of Sabah where the drama was taking place, told AFP.

He declined to provide details of what security forces had in store but his comments echoed growing Malaysian impatience with the situation.

In Manila, Philippine President Benigno Aquino urged the gunmen to surrender immediately.

"To those who have influence and the capacity to reason with those in (the affected town of) Lahad Datu, I ask you to convey this message: surrender now, without conditions," he said in a statement.

Malaysian Prime Minister Najib Razak, whose government has been embarrassed by the security breach, said in the shootout's aftermath that he told police and armed forces to take whatever action was necessary to end the impasse.

"Now there is no grace period for the group to leave," he was quoted as saying by Malaysian media, blaming the intruders for sparking the violence.

But the deadly clash drew criticism from opposition leader Anwar Ibrahim.

"Why is our government lax about national security,?" he said in a statement late Friday, adding that the government must explain what transpired in the bloody clash claiming two Malaysian lives.

Muslim-majority Malaysia had previously avoided tough talk, expressing hope the intruders would leave peacefully.

But even if they give up, they will face Malaysian prosecution, Hamza said, after he met with Malaysia's home minister and other top security officials.

Local residents were staying indoors and the usually bustling coastal town of Lahad Datu was quiet with most shops closed on Saturday.

Georgina Paulino, a 50-year-old street vendor, complained that her business has been badly hit.

"People are afraid they could be shot if they come out," she told AFP.

The Filipinos, who are estimated to number between 100 and 300, sailed from their remote islands to press Jamalul Kiram III's claim to Sabah.

Kiram, 74, claims to be the heir to the Islamic sultanate of Sulu, which once controlled parts of the southern Philippines and a portion of Borneo.

The Sulu sultanate's power faded about a century ago but it has continued to receive nominal payments from Malaysia for Sabah under a historical lease arrangement passed down from European colonial powers.