(Reuters) - Islamist rebels drove the Malian army out of the strategic northern town of Konna on Thursday, local residents said, in the fiercest fighting since militant groups seized control of northern Mali nine months ago.
The fall of Konna, some 600 km (375 miles) northeast of the capital Bamako, was a major setback to government forces which had claimed earlier on Thursday to be making headway against the alliance of al Qaeda-linked rebels.
Western and regional governments are keen to dislodge Islamists from a desert zone of northern Mali larger than France which they captured in April amid concerns they may use it as a launch pad to stage attacks. However, a U.N.-sanctioned military intervention by African troops is unlikely before September due to logistical and other problems.
After hours of gun battles, heavily armed Islamist fighters paraded in triumph through Konna's centre, saying they would push on to take the towns of Mopti and Severe, some 50 km (30 miles) south, residents said.
"We took the barracks and we control all of the town of Konna," MUJWA rebel spokesman Oumar Ould Hamaha told Reuters. "The soldiers fled, abandoning their heavy weapons and armoured vehicles."
News of the fall of Konna sowed panic in Mopti and Severe, site of a large military barracks and airport. The towns lie at the crossroads between Mali's desert north and the greener, more populous south.
"We have received the order to evacuate," said the local head of one U.S. aid agency. "We have already pulled all our personnel and material out of Mopti."
Former colonial power France has been amongst the most outspoken advocates of an African-led military intervention. Many in Mali's military have also been keen to launch a campaign to reverse their rout by the militants in April.
An army official had earlier claimed that soldiers had retaken Douentza, a town some 120 km east of Konna, which has been in the hands of Islamists since September.
But residents and a rebel spokesman said Islamists had held their positions inside Douentza, exchanging fire with government troops stationed just outside.
The renewed fighting could derail hopes of a breakthrough at peace talks between the Malian government, the rebels and separatist Tuaregs which were scheduled to start in Burkina Faso on Thursday but have been postponed until January 21.
Djibril Bassole, Burkina Faso's foreign minister and regional mediator in the crisis, on Thursday called on the parties to respect a ceasefire deal agreed on December 4. Ansar Dine, one of the main rebel factions, last week ended its ceasefire because of the plan for military intervention.
Once an example of democracy and development in turbulent West Africa, Mali was plunged into crisis by a March 2012 coup which allowed Tuareg rebels to seize the north, demanding an independent homeland. Their rebellion was hijacked by Islamists.
Bickering among Mali's political elite over a roadmap to end the post-coup transition is causing paralysis and hurting efforts to unite the country with elections to choose a replacement for a caretaker government.
Thousands of people took to the streets in Bamako on Wednesday calling for an end to political crisis, blocking the city's two main bridges. The government responded on Thursday by shutting down schools in Bamako and Kati until further notice.
Tiemoko Diallo, Bamako
(Additional reporting by Adama Diarra and Bate Felix; Writing by Bate Felix; Editing by Richard Valdmanis, Peter Millership and Jason Webb