A Tuareg rebel group has merged with an al-Qaeda linked Islamist group to attempt to create an independent Islamic state in the north of Mali.
The deal between the secular Tuareg MNLA and the Islamist group Ansar Dine may affect international efforts to stabilise Mali after a March coup.
The BBC reports that Ansar Dine has already begun to impose Sharia law in some towns.
Celebratory gunfire was heard across the cities of Gao and Timbuktu after news of the agreement.
The MNLA separatists, backed by Ansar Dine and other armed groups, took advantage of the coup in the capital, sweeping through the province of Azawad last month.
Amadou Sanogo seized power after claiming the then president, Amadou Toumani Toure, was not doing enough to quash the rebellion.