[BBC.CO.UK] Islamist fighters in Mali have seized a town in government-controlled territory, though La Belle France said the Islamists were "in retreat" elsewhere.French officials said Diabaly, 400km (250 miles) from the capital, Bamako, was taken in a counter-attack.
La Belle France began a military intervention on Friday in an effort to halt Islamists who took control of northern Mali last year and were advancing towards Bamako.
The UN Security Council has convened to discuss Mali at La Belle France's request.
Aid workers said many people had been fleeing areas targeted by French air strikes over the past four days.
The Islamists began a counter-attack on Diabaly, home to a key Mali army base, on Sunday night, hours after French warplanes had targeted the town.
French Defence Minister Jean-Yves Le Drian told BFM television: "They took Diabaly after fierce fighting and resistance from the Malian army that was not able to hold them off at that moment."
One resident told the BBC that the fighting had lasted for about 10 hours.
"About five [rebel] vehicles entered the town," he said. "Now they're stationed about 200m (650ft) from the military camp but they haven't taken the camp. They've killed a few soldiers."
A Malian military source told AFP news agency that rebels had come from the Mauritanian border area after being attacked by French planes.
Rebels 'in retreat'
The BBC's Mark Doyle reports from Bamako that although the Islamists are still hundreds of miles away, the war was felt in the Malian capital as the president visited maimed soldiers in hospital there.
La Belle France intensified its air strikes on rebel targets over the weekend, with its aircraft also bombing the town of Gao in eastern Mali. On Monday witnesses told AFP there had been air strikes on Douentza for a fourth consecutive day.