Mali's embattled coup leader Captain Amadou Sanogo has called for outside help as advancing Tuareg and Islamist fighters seized ground, including a key northern town, from overwhelmed soldiers.

The Mali army said early Saturday it had pulled its troops out of two towns in the country's northeast, hours after Tuareg separatist rebels forced them out of the strategic town of Kidal.

"We have strategically abandoned our positions in the towns of Ansogo and Bourem to reinforce our positions in Gao," the army said in a statement.

Gao is the largest town in northern Mali that remains under the control of Mali's new ruling junta.

The appeal from Sanogo came Friday as the week-old junta, already frozen out by its foreign allies, stares down possible economic sanctions from neighbouring countries, demanding a return to democracy, which could cripple the landlocked nation.

Angry at the old government's "incompetence" in dealing with the conflict, the renegade soldiers chased President Amadou Toumani Toure out of power on March 22, a move which prompted stiff rebukes from abroad.

"The rebels continue to attack our country and terrorise our people," coup leader Sanogo told journalists at the military barracks outside Bamako which have become the junta's headquarters.

"The situation is now critical, our army needs support from Mali's friends to save the civilian population and protect Mali's territorial integrity."

After heavy fighting, Tuareg separatist rebels and an allied armed Islamist group on Friday entered Kidal, 1,000 kilometres (620 miles) from the capital.

"The rebels are in charge, the army put up no resistance," after 48 hours of fighting, a teacher said on condition of anonymity.

A witness said looting followed the fall of Kidal.

Malian troops were seen fleeing toward the larger city of Gao, home to a regional military base which is believed to be one of the rebel's next targets along with the fabled city of Timbuktu.

Sanogo, speaking on public television, said the new ruling junta would do everything "to assure the security of the people and property" in Kidal and was "preparing to return there."

On its website, the Azawad National Liberation Movement (MNLA)'s spokesman Bakaye Ag Hamed Ahamed said it would "continue the offensive against two other regional capitals to dislodge the Malian regime and its army."

Fighting alongside the MNLA were Islamists of the group Ansar Dine (Defenders of Faith, in Arabic) which has emerged on their flanks in recent weeks.

The relationship is ambiguous but Ansar Dine -- which aims to establish sharia, or Islamic law, in the region -- has appeared to take the lead under renowned Tuareg rebel Iyad Ag Ghaly.

Ag Ghaly -- who led Mali's second Tuareg rebellion since independence between 1990 and 1995, and has ties to Al-Qaeda's north African branch -- made a triumphant entrance in his native Kidal, witnesses said.

A civil servant in Kidal said Ag Ghaly entered the town in a convoy of vehicles flying "black flags with Arabic symbols on them."

The army camp there was partially burnt down and the governor, regional army commander and other local and army officials held, a local official said.

The MNLA in mid-January relaunched a decades-old fight for the independence of what the Tuareg consider their homeland in the vast desert north.

The poorly-equipped Malian army has proved no match for the desert warriors, boosted by the return of heavily-armed fighters from Libya.

The latest clashes came as Mali's coup leaders faced greater isolation. The 15-nation regional bloc, the Economic Community of West African States (ECOWAS), on Thursday threatened a "diplomatic and financial embargo" unless constitutional order is restored within 72 hours.

Regional leaders tightened the noose around the junta after scrapping a mediation mission in mid-air on Thursday when dozens of pro-coup demonstrators swarmed the runway at Bamako's airport, preventing them from landing.

The grouping has warned its regional troops are on standby.

ECOWAS is threatening to freeze Mali's account at the common central bank based in Dakar and close all its borders with the landlocked country which relies heavily on its neighbours for fuel imports and exports.

The European Union, the United States and other Western powers have suspended hundreds of millions of dollars of support for Mali -- except for emergency aid to drought-hit regions.

Washington, which has warned the region was becoming a new hub for Al Qaeda, on Friday supported ECOWAS' efforts to force the junta to step down but said it was "very concerned" by the latest Tuareg advances.

The Tuareg offensive has caused more than 200,000 people to flee their homes in the remote region that is also a hub for arms and drug trafficking.

The seizure of Kidal, the capital of the northeastern region bordering Niger and Algeria, is a huge prize for the rebels who have already taken the two other main towns of Tessalit and Aguelhok in the province.