The two groups that seized control of Mali's north have announced that they have agreed to merge and create an independent Islamic state in the northern half of the west African nation.
The merger, announced on Saturday, would see the Tuareg separatist-led National Movement for the Liberation of Azawad (MNLA), and Ansar Dine fighters join forces to nominally control an area the size of France.
"I have just signed an accord that will see an independent and Islamic state where we have Islamic law", Alghabass Ag Intalla, a leader of the Ansar Dine, said on Saturday.
The group is accused of being linked to al-Qaeda in the Islamic Maghreb, a North African group responsible for dozens of suicide attacks as well as the kidnappings of foreigners, some of whom were later executed.
The Saturday evening agreement was signed in the northern town of Gao, with celebratory gunfire in both Gao and Timbuktu, another town under their control, marking the development.
The two groups have been in disagreement since March, when they took over the north of Mali and forced Malian government troops to flee south.
Ansar Dine wants to impose sharia, or Islamic law, in the area they occupy, a move the secular NMLA had been hesitant of.
Speaking to Al Jazeera from the UK, Akli Sha'kka, spokesman of the Tuareg Youth Movement, said that the merger was "a major turning point in Azawad history".
"This [co-operation] comes after fraught discussions that have been taking place for almost a month now. The two groups still do not agree ideologically," Sha'kka said.
"But the international community has to know that this will not be an extremist state. It is an Islamic state and the MNLA stated clearly at the beginning of the negotiations that Sharia law will not be imposed in the way that Ansar Dine was pushing for in the beginning."
Ansar Dine had previously said they were opposed to the NMLA objective of creating an independent homeland for Mali's Tuaregs, a goal they now say they are backing.
During the late March advance, residents said there were visible turf wars with the fighters occupying different areas of the cities under their control, as the groups' two separate flags competed for domination of various landmarks.
In Timbuktu, the last major town in the north to fall to fighters from the two groups, the NMLA took over the local airport, located on the outskirts of town, while Ansar Dine installed itself in the military camp at the centre of the city.
The agreement suggests both sides have made a major concession in talks that have been going on intermittently for weeks.
The agreement will likely increase the chance of the groups reaching their goal and will enable them to combine their fighters.
The north of Mali fell after a coup d'etat in the capital Bamako on March 21 left government forces disorganised and lacking motivation to fight.
The transitional government of Mali says it wants to take back captured territory but has so far been too distracted by issues of restoring political stability in Bamako to focus its attention of the issue of the north.