The battle for the city of Marawi in the southern Philippines will have long-term repercussions across the region, according to a report released by Institute of Policy Analysis of Conflict (IPAC).
For two months, the Philippines military has tried to take back the city from pro-Islamic State fighters who want to establish a caliphate.
The report — titled Marawi, The East Asia Wilayah and Indonesia — suggested the conflict had already inspired violence elsewhere in the region and may lead to more attacks.
"The risks won't end when the military declares victory," IPAC director Sidney Jones said.
The report noted about 20 fighters from Indonesia were sent to Marawi and warned if they return they could help to train Indonesian extremists to a higher level.
More than 500 people have died in the combat, more than 400 of them militants. More than 40 are said to be civilians, and the remaining military.
Philippines President Rodrigo Duterte has asked congress to extend martial law on the Island of Mindanao until the end of the year.
Marawi was taken by militants on May 23 by members of the Abu Sayyaf and Maute militant groups.
Hundreds of thousands of people have been displaced.
'If you can't get to Syria, go to the Philippines'
The IPAC report also sited extensive new evidence on the chain of command between Syria and Marawi, with a Malaysian professor playing a crucial role.
It said Dr Mahmud Ahmad controlled recruitment and financing for foreigners wanting to join IS fighting in the Philippines.
"[The battle] has inspired young extremists from around the region to want to join," the report said.
"In Indonesia, it has helped unite two feuding streams of the pro-ISIS movement, inspired 'lone wolf' attacks and caused soul-searching among would-be terrorists about why they cannot manage to do anything as spectacular.
"One possible impact of Marawi is an increased risk of violence in other countries in the region as local groups are inspired or shamed into action by the Philippine fighters."
Ms Jones said mid-way through last year, the message from Syria changed.
"The message from Syria is that if it is getting too difficult to cross over, so if you can't get to Syria, go to the Philippines, and if you can't go to the Philippines, wage war at home," she told the ABC.
