Mali's military leaders, facing pressure from regional powers and a Tuareg rebellion in the north that has captured key areas including the ancient city of Timbuktu, have said they will restore the country's constitution.
Captain Amadou Sanogo, who grabbed power in a military takeover in March and dissolved the nation's constitution, said on Sunday that the 1992 law has been "reinstated".
"We make the solemn commitment to restore, from this day, the constitution of the Republic of Mali of February 25, 1992, as well as the republic's institutions," Sanogo told journalists in the capital Bamako.
He said the junta had "decided to engage, under the guidance of a mediator, in consultations with all the forces active in our country in the framework of a national convention".
These talks should lead to the creation of transitional organs "to organise free, open and democratic elections in which we will not participate," said Sanogo. He did not specify the duration of the transition.
Kadre Desire Ouedraogo, President of the Economic Community of West African States, ECOWAS, told Al Jazeera the West African regional bloc was satisfied with Sanogo's intentions. ECOWAS had earlier told the junta to start handing over power or face sanctions.
"This is what ECOWAS demands, that the constitutional order be re-established," Ouedraogo said.
"And if the junta is now accepting this plan we do not see any other difficulty, we are ready to accompany them to restore normality and then we will see how to deal with the situation in the north.
"We want a peaceful solution. That's why ECOWAS has called for a ceasefire and we offer negotiations with the rebels. But in case they don't accept the offer of negotiations, then ECOWAS will use any other means to protect the territorial integrity of Mali."
Sanogo's announcement came after Tuareg rebels, capitalising on the chaos in the country, captured the ancient city of Timbuktu on Sunday.
"[Tuareg rebels] have arrived in the town. They are planting their flag," El Hadj Baba Haidara, a member of parliament for Timbuktu, told the Reuters news agency by telephone.
A resident told Reuters the rebels had planted their flag at the governor's office, the mayor's office and the main military camp.
Several witnesses told the AFP news agency that rebels were in the city and that gunshots were heard.
The capture of Timbuktu, long a target of the Tuareg backed by Islamist fighters, came hours after the rebels took the garrison town of Gao following a withdrawal by Malian army forces.
Al Jazeera's Hashem Ahelbarra, reporting from Bamako, said that by capturing Timbuktu, the rebels had "managed to do what had eluded them for decades".
Ahelbarra said that when the army overthrew the government, they said it was with the intention of establishing a genuine democracy in Mali.
"However, what they failed to take into account was that the army was sort of disintegrating and that the rebellion was going to take advantage of that situation to claim more than one third of the country," he added.
Fighting under the banner of the National Movement for the Liberation of Azawad (MNLA), the rebels re-launched their decades-long military campaign for a separate homeland in mid-January and have since seized Kidal, another key town in the north.
The setbacks at the hands of the heavily armed rebels piled pressure on Mali's coup leaders who had been given until Monday to start handing back power or face sanctions by ECOWAS.
Mid-ranking officers toppled Malian President Amadou Toumani Toure on March 21 in protest at not having adequate weaponry to rein in the Tuareg rebels.
While coup leaders won some support from many Malians fed up with Toure's rule, the latest military defeats and the sheer scale of foreign disapproval have weakened their position.
"Everywhere it is burning. Mali cannot fight on all fronts at the same time ... Let us put our personal quarrels aside," Siaka Diakite, secretary-general of the UNTM trade union, said in a statement backed by anti-coup political parties.
Diakite had called on Sanogo, a hitherto obscure US-trained army captain, to agree an exit plan before the deadline imposed by the 15-state ECOWAS for a return of power to civilians.
In addition to a threat to close borders to a country largely dependant on fuel imports, ECOWAS had vowed to starve Mali of funds from the central bank of the regional monetary union, and impose asset freezes and travel bans on individual coup leaders.
Banks in Bamako put a limit on withdrawals on Saturday in anticipation of a run on their cash stocks on Monday, while shares in mining companies in Africa's third-largest gold producer have plunged due to the unrest.
On Saturday coup leaders hinted they were ready for compromise, announcing after talks with Blaise Compaore, Burkina Faso's president, that they would make new proposals for a transition to civilian rule.