French troops fighting alongside Malian government forces have driven back rebels from a strategic central town, halting an advance by the fighters controlling the country's desert north.
France on Friday launched air strikes to help the Malian authorities regain control over the town of Konna, captured by al-Qaeda-linked rebel alliance a day earlier.
"The Malian army has retaken Konna with the help of our military partners. We are there now," Lieutenant Colonel Diaran Kone told the Reuters news agency, adding that the army was mopping up rebel fighters in the surrounding area.
Western governments, particularly former colonial power France, had voiced alarm after the al Qaeda-linked rebel alliance captured Konna on Thursday, a gateway towards the capital, Bamako, 600km south.
The capture of Konna by the rebels - who have imposed strict Sharia Islamic law in northern Mali - had caused panic among residents in the towns of Mopti and Sevare, 60km to the south.
State of emergency
Interim President Dioncounda Traore, under pressure for tougher action from Mali's military, declared a state of emergency on Friday. Traore will fly to Paris for talks with his French counterpart, Francois Hollande, on Wednesday.
Calm returned after residents reported Western soldiers and foreign military aircraft arriving late on Thursday at Sevare's airport, the main one in the region.
Hollande said France would not stand by to watch the rebels push southward.
Paris has repeatedly warned that the rebel’s seizure of the country's north in April, which was boosted by the chaos created after junior army officers overthrew the government, gave them a base to attack neighbouring African countries and Europe.
"We are faced with blatant aggression that is threatening Mali's very existence. France cannot accept this," Hollande, who recently pledged his country would not meddle in African affairs, said in a New Year speech to diplomats and journalists in Paris.
The president said resolutions by the UN Security Council, which in December sanctioned an African-led military intervention in Mali, meant France was acting in accordance with international law.
French military operations in support of the Malian army against rebels "will last as long as necessary," France's UN ambassador, Gerard Araud, wrote in a letter to the Security Council obtained by Reuters.
In Washington, a US official told Reuters the Pentagon was weighing options in Mali, including intelligence-sharing with France and logistics support.
Foreign minister Laurent Fabius confirmed France had carried out air strikes against the rebels to prevent them conquering the whole of Mali. He refused to reveal further details, such as whether French troops were on the ground.
Military analysts said the Western soldiers may have been the first deployment of French special forces.
They voiced doubt, however, whether Friday's action heralded the start of the final operation to retake northern Mali – a harsh, sparsely populated terrain the size of France – as neither the equipment nor ground troops were ready.
"We're not yet at the big intervention," said Mark Schroeder, director for Sub-Saharan Africa analysis for the global risk and security consultancy Stratfor.
He said France had been forced to act when the rebels bore down on Sevare, a vital launching point for future military operations.
"The French realised this was a red line that they could not permit to be crossed," he said.
More than two decades of peaceful elections had earned Mali a reputation as a functioning democracy in a part of Africa better known for turmoil.
That reputation unravelled in a matter of weeks after a military coup last March that paved the way for the rebellion.
Mali is Africa's third largest gold producer and a major cotton grower, and home to the fabled northern desert city of Timbuktu, an ancient trading hub and UNESCO World Heritage site that hosted annual music festivals before the rebellion.