Islamists moved to impose sharia law in northern Mali after helping Tuareg separatists seize key towns, ransacking bars and banning Western-style clothes and music, residents said on Monday.
A lightning 72-hour advance by rebels over the weekend, which exploited the chaotic aftermath of a military coup in the distant capital, is the latest threat to stability in West Africa, whose leaders met for crisis talks in Senegal.
Coup leaders agreed on Sunday to prepare to hand power back to civilians after neighbouring states threatened to shut the land-locked country's borders.
Residents in the ancient trading post of Timbuktu said local Ansar Dine Islamists, who alongside Tuareg separatists seized the town on Sunday, had declared they were in control of the former Saharan tourist draw and would impose Islamic law.
A Reuters reporter in the northern city of Gao, seized by rebels on Saturday, said Islamists there were ransacking bars and hotels serving alcohol. In Kidal, the third main town of the region, one resident told Reuters music had been barred from radio stations and Western-style clothes had been banned.
Ansar Dine people have entered the town and they are saying that they are now in control, a tourist guide in Timbuktu, who declined to be named for fear of reprisals, told Reuters.
They have said they will institute sharia law. I heard that four youths caught destroying and looting Mali energy company property will be beheaded, he added. The report could not be independently verified.
In Gao, 300 km (200 miles) further east, food, fuel and medical supplies were starting to run out, threatening to aggravate the humanitarian plight that worsened with fighting that began in mid-January in a region already hard hit by last year's failed rains.
Oxfam said more than 200,000 Malians had been displaced since January.
Half of these people have fled to neighbouring countries, and they are in urgent need of food, water, sanitation and shelter, the aid agency said in a statement, warning that further waves of displacement were possible.
JUST BUYING TIME
West African leaders meeting in the Senegalese capital Dakar for the swearing-in of Senegal's new president were due to decide whether to follow through on a threat of sanctions after coup leaders pledged on Sunday to return power to civilians.
A deadline set by West African bloc ECOWAS for the junta to begin ceding power expired overnight.
One ECOWAS official doubted the junta would keep its word.
Captain Amadou Sanogo and his group are just buying time, Remi Ajibewa, head of political affairs and international cooperation at ECOWAS, said of the coup leader's pledge to reinstate the constitution and all state institutions before holding an election.
They have not set out any timetable to hand over power to a democratically elected government in Mali, he told Reuters.
ECOWAS threatened to close borders, isolate Mali diplomatically and freeze funding from the regional central bank. However there was no sign on Monday of moves to implement the measures.
Last month's coup, weeks before President Amadou Toumani Toure was due to step down for elections, shattered the international reputation of stability and democracy that Africa's No. 3 gold producer had previously enjoyed.
The push by rebels, whose ranks were swelled by fighters returning from the Libyan conflict, has also deepened insecurity across the Sahara-Sahel band, already awash with Islamists, traffickers and bandits. France and Britain have advised their citizens to leave the country due to the insecurity.
Ivory Coast President Alassane Ouattara, who heads ECOWAS, said he spoke to Mali's junta chief on Sunday to thank him for the pledge to restore constitutional order but did not indicate if the move had been enough to ward off regional isolation.
The threat of sanctions underlines how seriously Mali's neighbours take a coup which they fear could trigger similar attempts in their own countries which have been blighted by decades of civil war and power grabs.
Hama Ag Mahmoud of the rebel group MNLA's political wing, said it did not plan to push further south.
Our aim today is not to go beyond the borders of Azawad, he told Reuters of the territory, bigger than France, where the group aims to carve out a separate state.
We don't want to give anyone the impression that we are war-mongers so, once we have freed the areas we target, the job is done, he added.
Ag Mahmoud rejected any MNLA rebel links with Islamist groups but witnesses in Kidal and Gao reported signs of Islamist fighters having collaborated with the MNLA in the advance.
(Additional reporting by Laurent Prieur in Nouakchott. Adama Diarra in Bamako; Camillus Eboh in Abuja; Writing by David Lewis and Mark John; Editing by Robin Pomeroy)