Islamist fighters in Mali have seized a town in government-controlled territory amid a military intervention by France.

French Defence Minister Jean-Yves Le Drian said Diabaly, 400km (250 miles) from the capital, Bamako, was taken in a counter-attack on Monday.

Mr Le Drian insisted France’s campaign was “developing favourably”.

He said Islamists had retreated in the east but admitted French forces were facing a “difficult” situation against well-armed rebels in western areas.

Aid workers said many people had been fleeing areas targeted by the French air force.

The UN Security Council is due to discuss Mali later on Monday.

France began its military intervention last Friday in an attempt to halt Islamist rebels who took control of northern Mali last year and were advancing towards Bamako.

The Islamists began a counter-attack on Diabaly, home to a key Mali army base, on Sunday night, hours after French warplanes had attacked rebel positions near the town.

Mr 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.

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.

“The developments are in line with our expectations,” said Mr Le Drian. “The terrorist groups are in effect in retreat.”

But he said French forces had encountered “heavily armed militants” in the west, where he described the situation as “difficult”.

Rebels of the al-Qaeda-linked Movement for Oneness and Jihad in West Africa (Mujao), said that France would pay for its intervention.

Spokesman Abou Dardar told AFP: “France has attacked Islam. We will strike at the heart of France.”

Separately, militants in Somalia have published a photograph purportedly showing one of two French soldiers killed during a failed hostage rescue attempt. Friday’s raid on town of Bulo Marer, south of Mogadishu, came hours after the French intervention in Mali.

At least 11 Malian soldiers and a French helicopter pilot have died in Mali. More than 100 militants are reported to have been killed.

Medical charity Medicins Sans Frontieres said it had received numerous reports of people being killed or injured in Konna, and that in Douentza, bombardments and fighting were preventing the wounded from making it to hospital.

MSF said at least 200 people had fled to Mauritania by vehicle, with many more heading to the border on foot.

French Foreign Minister Laurent Fabius said France’s involvement would last “a matter of weeks” and rejected any parallel with the protracted Western mission in Afghanistan.

“Later on, we can come as back-up, but we have no intention of staying forever,” he said.

France has sent about 550 troops to the central town of Mopti and to Bamako.

They are set to be joined by troops from the neighbouring African states of Niger, Burkina Faso, Nigeria and Togo, some of which are now expected to arrive in Mali within days.

The UK is offering logistical support, with two cargo planes made available for a week to support French operations.

Islamist groups and secular Tuareg rebels took advantage of chaos following a military coup to seize northern Mali in April 2012.

But the Islamists soon took control of the region’s major towns, sidelining the Tuaregs.

One Islamist group, Ansar Dine, began pushing further south last week, seizing Konna.

The town has since been recaptured by Malian troops with French aerial support.

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