| Captain Amadou Sanago, the leading of the coup, is reported to have agreed to step down as part of the deal [Reuters]
Representatives of West African states and the military junta which seized power in Mali are reported to have reached a deal in which the country's president and the coup leader will both stand aside.
The agreement was brokered between members of the Economic Community Of West African States (ECOWAS) and the coup leaders during talks Bamako, the Mali capital.
A group of low-ranking soldiers lead by Captain Amadou Sanago ousted President Amadou Toumani Toure on March 22, just weeks before he was due to step down after an election, citing his mishandling of the north as a primary reason for launching the coup.
In the weeks following the coup, Tuareg rebels and Islamist fighters, have captured the northern regions of Mali, with the Tuareg declaring an independent state of Azawad on Friday.
"We solemnly proclaim the independence of Azawad as from today," Mossa Ag Attaher, a spokesperson for the Tuareg based in Paris, said on Friday, adding that the rebels would respect "the borders with other states".
The Tuareg have declared the city of Gao as the capital of their new country.
Mali has been gripped by instability, following the coup and advances by Tuareg fighters and other armed groups that have seen a string of northern towns fall under their control in the broadly triangular area of desert in northern Mali
The MNLA statement on Friday stressed the group's "firm commitment to create the conditions for lasting peace [and] to initiate the institutional foundations for a state based on a democratic constitution for an independent Azawad".
However, the move was immediately questioned by the Ansar Dine, an Islamist group which also joined the fight against Malian government forces, who claim to be against independence.
Tuareg rebels claim the Azawad region of northern Mali
"Our war is a holy war. It's a legal war in the name of Islam. We are against rebellions," Ansar Dine military chief Omar Hamaha said.
"We are against independence. We are against revolutions not in the name of Islam."
He was speaking in a video exclusively obtained by the AFP news agency and France 2 television filmed after the Islamist group's takeover of Timbuktu, where they have imposed Islamic law, forcing women to cover themselves and burning down bars.
Hamaha said they had "more than 120 prisoners" including thieves.
"We have tied them up and taken their weapons. We beat them well and it's likely we will slit their throats," he added, while it was not clear if this threat was aimed at all prisoners.
In the city of Gao, Ansar Dine kidnapped seven Algerian diplomats, according to witnesses and the Algerian foreign ministry.
Ag Attaher, speaking on behalf of the MNLA, called the kidnapping "deplorable", adding that his group had been against that action but finally went along with the move so as to spare lives.
"We are a liberation movement and we support the principles and values of democracy," he said.
"We distance ourselves completely from any Islamist movement and their fight for religious law."
Al Jazeera's Hashem Ahelbarra, reporting from Bamako, said the information found on the Tuareg website goes to show the unprecedented feelings of honour and pride, "after decades of suffering and wars are fights against what they describe as oppressive regimes."
"They say that finally they have an independent state, Azawad, and they will stick to that nation and fight for it until the last drop," he said.
He went on to say that since the international community does not seem convinced that an independent state is a realistic option, "the Tuareg can still hope to achieve some sense of larger autonomy, which would still be a great victory for them".
A series of international condemnations of the group's "independence" declaration rolled out as bodies around the world discussed the announcement.
A statement from the office of Jean Ping, the African Union's commission chair, called the announcement "null and of no value whatsoever".
"[Ping] calls on the international community as a whole to fully support this principled position of Africa," it said.
France, Mali's former colonial ruler, dismissed the declaration of independence, French defence minister Gerard Longuet said.
"A unilateral declaration of independence which is not recognised by African states would not have any meaning for us," Longuet told the Reuters news agency.
Ahmed Ouyahia, Algeria's prime minister, was quoted by France's Le Monde newspaper as saying the neighbouring country would "never accept questioning Mali's territorial integrity".
The UK Foreign Office released a statement saying they had temporarily suspended all in-country services, including consular services, and withdrawn their staff from the embassy in Bamako.
Alessandra Giuffrida, an anthropologist in the African Studies Department at the School of Oriental and African Studies in the UK, psoke to Al Jazeera about the legality of creating an independent state for the Tuaregs.
"They are taking advantage of a new situation, which is the lack of a constitutional government in Bamako, which means the MNLA was able to claim, according to international law, independence, and this is a new fact which has never occurred before in the history of the Tuareg," she said.
"According to international law experts, this actually gives the Tuareg some ground to fight legally for the independence of their state."
Giuffrida said the reaction of the international community was important because "they have an interest in maintaining the status quo".
"There is economic interest in the north of the country after the discovery of mineral resources," she said.
"The coup leaders were of the view that they would get more support from the people because of the failure of the military establishment to cope with the situation," said Al Jazeera's Hashem Ahelbarra, reporting from Bamako.
"But they suddenly found themselves in a strange situation - the coup leaders lost control of half of the country, and they're now hoping for international support."
The MNLA, which on Thursday said it had halted military operations as a result of their capture of the Azawad, called on the international community to recognise its independence.
"We completely accept the role and responsibility that behoves us to secure this territory," Ag Attaher said. "We have ended a very important fight, that of liberation ... now the biggest task commences."
But a Malian military source told the AFP news agency that Ansar Dine leader Iyad Ag Ghaly wielded more power in the north, with the backing of alleged regional al-Qaeda fighters.
"From what we know, the MNLA is in charge of nothing at the moment ... it is Iyad who is the strongest and he is with AQIM," the source said, referring to al-Qaeda in the Islamic Maghreb.
Witnesses told AFP that raiders had hoisted the black Salafist flag that has been the emblem of rebels who had overrun Gao, Timbuktu and other northern towns.
Amnesty International warned that north Mali was on the brink of a "major humanitarian disaster" while Oxfam and World Vision said crippling sanctions against the junta could have devastating consequences.
"All the food and medicine stored by major aid agencies has been looted and most of the aid workers have fled," said Gaetan Mootoo, Amnesty International's researcher on west Africa.
"The population is at imminent risk of severe food and medical shortages that could lead to many casualties especially among women and children who are less able to fend for themselves."