French troops backed by helicopters and planes have advanced on the key Malian town of Diabaly, seized a week ago by Islamic extremists.
Among the rebels there were fighters under the command of the mastermind of Algeria's recent terror attack.
Diabaly, a small town in central Mali, has been the scene of the first major battle in the war to retake the north of the country from fighters who have occupied the region for nine months.
"The operation in Diabaly is currently ongoing," said a French military spokesman.
The town appeared to be back under control of Malian and French forces.
In the nearby countryside life was returning to normal as well. Women washed children in an irrigation canal, while others washed clothes and placed them to dry on the banks. Families with suitcases and bags headed north in donkey-drawn carts, apparently returning home after fleeing the conflict.
Residents of Diabaly have said that the Islamists fled the town last week following days of French air strikes targeting them.
The French military, which began its offensive on January 11, said it again used fighters and helicopter gunships to carry out a dozen operations in Mali over the weekend, targeting "terrorist vehicles" in half of those strikes.
Defence Minister Jean-Yves Le Drian said the airstrikes had caused "significant" - though unspecified - losses among the jihadists, and only minor skirmishes involved French forces on the ground.
Meanwhile, the extremist group behind the massacre in Algeria threatened more attacks against foreign targets if France does not bring an immediate halt to its military operation in Mali.