French-backed Malian troops on Friday wrested the key town of Konna from Islamist rebels as hostage-takers in neighbouring Algeria said they wanted to negotiate an end to France\'s military intervention. Conflicting reports emerged about a second central town, Diabaly, which the Malian army said had been recaptured while the French defence ministry said there was \"no fighting going on at this time\" there. French and Malian troops finally took Konna, a key town about 700 kilometres (400 miles) from the capital Bamako, after days of fighting, the French defence ministry and the Malian army said. \"We have wrested total control of Konna after inflicting heavy losses on the enemy,\" the Malian army said. Colonel Didier Dakouo, head of the Malian forces based in Sevare, south of Konna, told AFP his troops had \"crushed the enemy.\" A security source said Malian soldiers were backed by French air strikes to ease their entry into the town, which the Malian army inaccurately claimed to have recaptured last Saturday. \"They French troops were welcomed with joy and rejoicing. Everything returned to normal, the extremists have left and the people are resuming thir business,\" Amadou Guindo, a deputy of Konna\'s mayor, told AFP over the phone. As a dramatic hostage siege unfolded in Algeria -- where extremists took hundreds captive in a gas field to retaliate for the week-old French operation in Mali, sparking a deadly commando raid -- fighting in Mali continued unabated. In Diabaly, which the Islamist militants seized in a counter-offensive into government-run territory on Monday even as their bases were pounded by French fighter jets, local sources reported the rebels had been driven out. \"Diabaly is freed, the Islamists have left and the French and Malian troops have entered the town,\" said a member of the local municipal council. Her statement was confirmed by a regional security source. The French defence ministry said it did not consider Diabaly to have been retaken, but it was unclear if the Islamists were still in the town. The rebels\' retreat coincided with a demand from veteran Algerian Islamist Mohktar Belmokhtar for talks to end the French campaign against extremists controlling the north of Mali. Belmokhtar, a one-eyed Algerian jihadist with Al-Qaeda ties, has claimed responsibility for launching Wednesday\'s attack on an Algerian gas complex. A source close to him told Mauritania\'s ANI news agency that a video would be distributed to the media proposing that \"France and Algeria negotiate an end to the war being waged by France in Azawad\", or northern Mali. Mauritania\'s ANI news agency, quoting the abductors, reported that the hostage-takers were still holding seven foreigners on Friday. A security official in Algeria said 12 hostages have been killed since the army launched its operation against the militants. The French military operation in neighbouring Mali started a week ago and was prompted by the fall of Konna to rebels amid fears they would push south to Bamako from their northern stronghold. French Defence Minister Jean-Yves Le Drian said Friday that Paris had increased its troop numbers by 400 in a single day, from 1,400 Thursday to 1,800, \"and the progress on our presence on the ground continues.\" France plans to deploy 2,500 soldiers. Concerns about the humanitarian situation in Mali mounted with UN agencies voicing fear that fighting could displace hundreds of thousands in the coming months. Bamako\'s Archbishop Jean Zerbo said a \"new period of suffering has begun for the Malian people\" and called for the creation of a humanitarian corridor to transport food and medicines to the affected populations. \"The winter season... makes the humanitarian situation much more complicated.\" French Foreign Minister Laurent Fabius is due to attend an emergency summit of the West African bloc ECOWAS on Saturday in the Ivory Coast city of Abidjan to accelerate the planned African deployment of a total 5,800 troops. \"I will go there with a military attache and we will see with our African friends how we can speed up the deployment of MISMA,\" or the International Mission for Mali Assistance, he told AFP.