By Bate Felix
DIABALY, Mali (Reuters) - French and Malian armored columns rolled into the towns of Diabaly and Douentza in central Mali on Monday after the al Qaeda-linked rebels who had seized them fled into the bush to avoid air strikes.
France said the advance was a significant step in its campaign to break Islamist fighters' grip over Mali's vast desert north, a presence raising fears of the region becoming a an African launchpad for international militant attacks.
The stakes in Mali rose dramatically last week when Islamist gunmen cited France's intervention as the reason for attacking a gas plant in neighboring Algeria, seizing hundreds of hostages and sowing fears the conflict would spill across borders.
"This advance by Mali's army into towns held by their enemies is a clear military success for the government in Bamako and for French forces supporting the operation," French Defense Minister Jean-Yves Le Drian said.
France, which has made 140 bombing sorties since January 11, plans eventually to hand over the military operation to a U.N.-sanctioned African mission - although that deployment has been hampered by a lack of supplies, funds and training.
Diabaly, 350 km (220 miles) north of Mali's dusty riverside capital Bamako, had harbored the main cluster of insurgents south of the frontline towns of Mopti and Sevare.
Douentza, some 800 km from Bamako along the eastern road to the rebel stronghold of Gao, was a staging post in the rebels' southward advance two weeks ago that prompted France to intervene for fear they would capture the Malian capital.
In Diabaly, the dusty streets were now littered with the charred wreckage of eight rebel pick-up trucks. Residents said 200 Islamist fighters had held them captive for three days as human shields against French air strikes.
"There were 12 of us in the house, with no food or water," said 18-year-old Seydou Diarra. "They stopped us from leaving the village. They told us we'll die together and those who insisted on leaving were unbelievers."
Malian soldiers proudly displayed some 80 boxes of machine gun ammunition left behind by the fleeing rebels. Life gradually returned to the town's main street as shops reopened and children played on the parade ground where French and Malian troops parked their armored personnel carriers.
France has sent 2,150 ground troops to Mali and deployed jet fighters and attack helicopters that hammered rebel bases for an 11th day on Monday, as it awaited troops from nearby African nations, pouring into Bamako, to deploy to the front line.
Some 1,000 African troops from the West African regional bloc ECOWAS and the central African nation of Chad have arrived, and that number is expected to top 5,000 in the coming weeks.
Military experts say the swift and effective deployment of African forces is crucial to sustain the momentum of France's air campaign and prevent Islamists from melting away into the empty desert or the rugged mountains near the Algerian border.
The Islamist alliance in Mali groups al Qaeda's North African wing AQIM and the Malian militant groups Ansar Dine and MUJWA. It has imposed harsh sharia, meting out amputations and destroying ancient shrines sacred to moderate Sufi Muslims.
France aims to sweep the Islamists from northern Mali, an area the size of Texas, to prevent them using it as a base to mount attacks on the West or coordinate with other Islamist militants such as Nigeria's Boko Haram and Somalia's al Shabaab.
Paris aims to hand over the military operation to the U.N.-mandated African-led International Support Mission to Mali (AFISMA) "as quickly as possible. Until that happens, we shall do our duty," President Francois Hollande said on Monday.
"We know that's going to take time."
The Algerian hostage-taking, claimed by veteran jihadist Mokhtar Belmokhtar in the name of al Qaeda, has placed Mali conflict firmly on the agenda of Western capitals.
Belmokhtar's Mulathameen Brigade warned of further attacks on foreign interests unless France halted its intervention.
Algeria said 37 foreigners - including seven Japanese, four Britons, a Frenchman and an American - were killed during the hostage taking, ended with an assault by its security forces.
Britain, whose nationals were among those caught up in the hostage crisis, said on Monday it would increase counter-terrorism and intelligence aid to Algeria and consider giving more help to France to fight the Mali rebels. But it ruled out any direct British military intervention in Africa.
Addressing parliament, British Prime Minister David Cameron said a "patient, intelligent, but tough" approach was the best way to defeat terrorism. He stressed the "long-standing and deep" root causes of terrorism and pledged to help foster democracy and the rule of law in places at risk of Islamist militancy.
Egypt, however, warned that military intervention in Mali would aggravate strife in Africa and risk alienating the rest of the continent from its Arab north.
"The intervention must be peaceful and developmental and funds must be spent on development," Egyptian President Mohamed Mursi, a freely elected Islamist, told an Arab development conference in Saudi Arabia.
The United States sent its first flight bringing logistical support on Sunday but has no plans to send combat troops.
France has appealed for international donors to help fund the African mission at a conference on January 29. The European Union also said it would host a meeting on Mali on February 5, with the support of the United Nations and the African Union.
REBELS DRIFT AWAY
In recent days, Islamists have melted into the scrubland of central Mali, preferring not to engage directly with Malian and French troops. Residents of Diabaly said some rebels had doffed their flowing robes to blend in with the population, raising fears of ambushes and booby traps left behind in captured towns.
A resident of Timbuktu told Reuters by satellite telephone on Monday that scores of pick-up trucks carrying Islamist fighters had arrived there since Saturday, as the rebels apparently pulled their forces back to their desert strongholds.
The push northward by the Malian army has raised the specter of ethnic reprisals by security forces and militia groups. Human Rights Watch said it had received reports of serious abuses being committed by the Malian army against civilians in Niono.
There have also been reports of killings by Malian soldiers of lighter-skinned Arabs and Tuaregs, who are widely blamed for the rebellion that swept northern Mali.
In Diabaly, angry residents said the rebels had been led there by former army soldiers led by a local Tuareg captain who had deserted to join the Islamists.
"Only a person who knows Diabaly very well would have been able to bring them here," said Diabaly Mayor Oumar Diakite.
(Additional reporting by Adama Diarra and Tiemoko Diallo in Bamako, Vicky Buffery, John Irish and Elizabeth Pineau in Paris, Mohammed Abbas in London; Writing by Richard Valdmanis; Editing by Daniel Flynn and Mark Heinrich)