France, warning that Islamist control over Mali's vast desert north threatens the security of Africa and the West, had targeted Diabaly in an eighth day of air strikes aimed at dislodging hardened al Qaeda-linked fighters there.

"Soldiers are in the town carrying out mopping up operations," Diabaly Mayor Oumar Diakite told Reuters by telephone. "There are lots of burned-out vehicles that the Islamists tried to hide in the orchards."

A commander in the Malian army in nearby Markala said ground forces were operating in Diabaly, which lies about 360 km (220 miles) northeast of Bamako, but could not confirm that the town, seized by Islamists on Monday, had been recaptured.

If officially confirmed, it would be a second military success for the French-led military alliance after Islamists on Thursday night abandoned Konna, to the north of the central garrison town of Sevare.

Armed with weapons seized from Libya after the 2011 fall of Muammar Gaddafi, the Islamist alliance of al Qaeda's North African wing AQIM and home-grown Malian groups Ansar Dine and MUJWA has put up staunch resistance.

The progress of French and Malian troops has been slowed also because insurgents had taken refuge in the homes of civilians, residents said.

French President Francois Hollande ordered the intervention on the grounds that the Islamists could turn northern Mali into a "terrorist state" radiating threats beyond its borders.

Despite threats from militants to attack French interests around the world, France, which now has 1,800 troops on the ground in Mali, has pledged to keep them there until stability returns to the poor, landlocked West African nation

In the first apparent retaliatory attack, al Qaeda-associated militants took dozens of foreigners hostage on Wednesday at a natural gas plant in Algeria, blaming Algerian cooperation with France. Algerian security sources told Reuters about 60 foreigners were still being held at the facility where some 30 hostages were killed during an army attack on Thursday.