By Adama Diarra and Tiemoko Diallo
BAMAKO (Reuters) - Al Qaeda-linked Islamists militants seized control of the headquarters of the local separatist rebels in the north Mali town of Gao on Wednesday after a bloody battle that killed at least 20, residents said.
The battle follows weeks of tension between the separatist Tuareg-led MNLA and better-armed local Islamists who helped it take control of the northern two-thirds of Mali in April but whose goal is to impose sharia Islamic law across the country.
"The Islamists are now controlling the situation because they are the only ones driving around in the town, some in their vehicles and others on vehicles they have recovered from the MNLA," Gao resident Moktar Toure told Reuters by telephone.
"But we live in fear of an MNLA counter-offensive against the Islamists even though they are trying to reassure people that it is over," Toure said.
A spokesman of the Islamist Ansar Dine group said their militants had taken control of the governor's residence and chased away MNLA fighters.
One witness told Reuters earlier on Wednesday that the former governor's residence in Gao which the MNLA had turned into the "palace" of the northern territory it calls the independent state of Azawad, had been heavily damaged by heavy arms fire during the battle.
The fighting will add to fears of Mali becoming a potential launchpad for jihadi action. The U.N. Security Council has said it would be ready to support military intervention by Mali's neighbors but first needs more details of their plans.
"The MNLA and MUJWA are launching rockets at each other between the two markets of the town and the governor's building," Gao resident Sila Askou said by telephone of the governor's premises in which the MNLA has set up headquarters.
Gao resident Habsatou Cisse said by telephone she saw five bodies from the house in which she was sheltering. Others reported 11 bodies and four bodies in separate locations. They said civilians were among those killed but had no other details.
Separately, residents in the northern town of Timbuktu 300 km (200 miles) to the west, said they had seen armed convoys of the local Ansar Dine Islamist group - a MUJWA ally - racing to Gao.
"We are going to obliterate the MNLA today," local Islamist Ousmane Toure said by telephone. "Enough is enough."
Malick Aliou Maiga, another resident contacted by telephone, said the MNLA headquarters had been badly damaged in the battle, which started around mid-morning.
MNLA spokesmen based in Mali and in Europe were not immediately contactable for comment but one member of the group, speaking on condition of anonymity, said the attack on the headquarters had been repelled.
"Either the MUJWA backs off or we are heading towards an all-out armed confrontation," said the MNLA member.
Another MNLA member said the clash started because of its refusal to back the sharia law which Ansar Dine, the MUJWA and others are already seeking to impose in the north, a sharp contrast to the moderate local version of Islam.
(Reporting by Bate Felix in Dakar; Laurent Prieur in Nouakchott; Writing by Mark John; Editing by Michael Roddy)