(Reuters) - Mali's junta leader promised to reinstate the constitution from Sunday, hours before a deadline set by West African neighbors to start handing over power, and as rebels encircled the ancient trading post of Timbuktu.
Amadou Sanogo, who led a military coup on March 22, also pledged to re-establish all state institutions before organizing a transfer of power back to civilians through democratic elections.
He made the promises after the 15-state ECOWAS grouping told the junta to start handing over power by midnight on Sunday or face sanctions, including a crippling closure of borders around the land-locked state.
The aim of the putsch by disgruntled soldiers was to step up the battle against northern rebels. But the coup has backfired, emboldening the Tuareg-led rebellion to seize new ground in its quest for a northern homeland. On Sunday they encircled their latest target, Timbuktu.
We are making the solemn commitment to re-establish, from today, the Malian constitution of Feb. 25, 1992 and the institutions of the republic, Sanogo said in a statement read out at a barracks outside the capital Bamako.
Sanogo, a hitherto obscure U.S.-trained captain, said the junta had agreed to consult with local political forces to set up a transition body with the aim of organizing peaceful, free, open and democratic elections in which we will not take part.
There was no immediate reaction from ECOWAS. However, the re-establishment of the constitution and state institutions were two measures named earlier by an envoy of Burkina Faso President Blaise Compaore, the crisis mediator, as essential preconditions for Mali to avoid sanctions.
After that, we shall see what happens as regards the person of (Malian) President Amadou Toumani Toure, Burkina Foreign Minister Djibril Bassolet told Reuters by telephone minutes before Sanogo's statement. We want to be careful, we have to go gradually, he said, warning of the risk of a power vacuum.
SOLDIERS SEEN SHEDDING UNIFORMS
Boosted by heavily armed Tuareg returning from Libya and tapping into frustrations over underdevelopment in the north, MNLA rebels launched a push for independence in mid-January.
The rebels have fought alongside another rebel group seeking to impose sharia law, underscoring the complex web of gunmen in a zone that also is home to local al Qaeda groups and smugglers
The northern administrative centre of Kidal fell to the rebels on Friday, followed on Saturday by the garrison town of Gao. Timbuktu's capture would largely complete the rebels' plan of seizing Mali's north, a desert territory bigger than France.
The National Movement for the Liberation of Azawad (MNLA) announces its army is surrounding the town of Timbuktu to dislodge what remains of the Malian political administration and military there, the main rebel group said on its website, referring to the Azawad region it wants to make its homeland.
They have arrived in the town. They are planting their flag, El Hadj Baba Haidara, member of parliament for Timbuktu, told Reuters by telephone. A resident said the MNLA rebels had planted their flag at the governor's office, the mayor's office and the main military camp.
Earlier, residents reported that army units were already abandoning their bases, leaving the defense of the town to local militias who took to the streets and fired in the air.
The (military camp) is empty. Most of the soldiers from the south (of Mali) have fled. It is only the Arabs who are defending the town, said a Malian source in contact with local residents and the military.
The source was referring to Malians of Arab origin, both in the regular army and those who have formed a local militia.
Another resident, who declined to be named, said she saw soldiers putting on civilian clothes.
Timbuktu, for centuries a major trading post in the Sahara, was fabled for its gold, slaves and other goods, but it fell into decline even before the 19th century French occupation. Attempts to develop tourism have been hit by rising insecurity, including kidnappings of Westerners by local al Qaeda agents.
While coup leaders won early support from many Malians weary of Toure's rule, the latest military defeats and the sheer scale of foreign disapproval have weakened their position.
Everywhere it is burning. Mali cannot fight on all fronts at the same time ... Let us put our personal quarrels aside, Siaka Diakite, Secretary-General of the UNTM trade union, said in a statement backed by anti-putsch political parties.
Ivorian President Alassane Ouattara has said he expected Toure, who has said he is safe in an undisclosed location in Mali, to see out the remaining two months of his mandate before a transitional national unity government was named.
Then elections should be held between 21 and 40 days later. It is up to the political class to see if that is possible, Ouattara, the ECOWAS head, told Ivorian television.
(Additional reporting by David Lewis in Dakar; Writing by Mark John; Editing by David Stamp)