French-led troops have killed hundreds of Islamist fighters in an operation to reclaim Mali's vast arid north, France's defence minister said Tuesday as its army secured the rebels' last bastion.

Defence Minister Jean-Yves Le Drian said the 26-day military intervention has killed "several hundred" Islamist militants as its air and ground forces chased them from their northern strongholds into remote mountainous terrain in the far northeast.

The defence ministry said the Islamists died in French air strikes on vehicles transporting fighters and equipment, and in "direct combat in Konna and Gao", key central and northern towns.

France's sole fatality so far has been a helicopter pilot who was killed at the start of the military operation, while "two or three" soldiers have suffered light injuries, Le Drian said.

Mali said 11 of its troops were killed and 60 wounded after the battle at Konna last month but it has not since released a new death toll.

"The Malian army took some prisoners, not many, who will have to answer to Malian courts and to international justice," he said, adding that "some" of those detained were high-ranking militants.

Days of air strikes have targeted the mountains surrounding Kidal where Islamist insurgents are believed to be hiding in hillside caves near the Algerian border.

Kidal, the last town to fall of those seized by Al Qaeda-linked fighters who occupied northern Mali for 10 months, "is under the control of French forces" with "the support of African and in particular Chadian forces," Le Drian said, after the ministry earlier said 1,800 Chadian troops had entered the town.

Since France launched its surprise intervention, the rebels have fled to the Adrar des Ifoghas massif around Kidal, a craggy mountain landscape honeycombed with caves, where they are believed to be holding seven French hostages.

A Tuareg group formerly allied with the Islamists, the Azawad National Liberation Movement (MNLA), meanwhile said it had retaken Menaka, a town previously claimed by French-led forces.

A Malian security source confirmed the Tuareg group was in the town 80 kilometres (50 miles) from the Niger border, which Nigerien troops had taken from Islamist occupiers but then left as they continued their advance.

The MNLA -- which was fighting for an independent state alongside the Islamists but then fell out with the extremists -- earlier said it was working with France against "terrorists" in the region.

"In the framework of anti-terrorist coordination put in place with French forces", the MNLA will provide intelligence on "top terrorist officials" they have arrested, a spokesman said in Burkina Faso.

The group said it was responsible for the arrest on Sunday of two Islamist leaders, Mohamed Moussa Ag Mohamed, the number three in Ansar Dine (Defenders of the Faith), and Oumeini Ould Baba Akhmed of the Movement for Oneness and Jihad in West Africa (MUJAO).

The MNLA launched a rebellion a year ago fighting for a state for the desert nomad Tuareg people, who have long felt marginalised by Mali's government.

But, after being chased from their strongholds by the Islamists, they have voiced a willingness to negotiate since France intervened.

With France eager to shed some of the military burden in Mali and 8,000 pledged African troops being deployed at a slow trickle, observers have said Paris is likely examining whether the MNLA is a possible partner.

Le Drian said France had "functional relations" with the MNLA in Kidal but that fighting terrorists alongside them was "not our objective".

"As soon as the MNLA declares -- it seems it is doing so -- that it is not terrorist, or secessionist, and that it wants to be part of the internal dialogue in Mali, it will have a place at the table," he said.

In France, President Francois Hollande, whose decision to intervene in Mali won him a hero's welcome there during a whirlwind tour on Saturday, urged Europe to fight drug trafficking in west Africa, telling the European Parliament that "terrorism feeds on narcotics trafficking".

Analysts say the groups that seized northern Mali depend on drug trafficking, smuggling and kidnapping to arm themselves.

In Brussels, global players including the United Nations and African Union met to carve out plans for Mali's future once the 26-day-old offensive draws to an end.

"A free and fair electoral process, the return to full constitutional order and a genuinely inclusive national dialogue are key to address the instability in Mali and restore security and development in the Sahel region across the board," they said in their final statement.

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