The current crisis in Mali is one of the most serious challenges facing the continent, the head of the African Union commission Jean Ping told a meeting of heads of state here.

"The situation in Mali is one of the most serious situations our continent is confronted with," Ping said at the opening of a closed door meeting on Mali and on tensions between Sudan and South Sudan.

U.S. President Barack Obama authorized the use of $10 million in emergency funds on Thursday for people displaced by the conflict in northern Mali, the White House adding it was "deeply concerned".

The funds will support efforts of the United Nations High Commissioner for Refugees, White House National Security Council spokesman Tommy Vietor said.

Force will probably have to be used to dislodge Islamists from northern Mali, French Foreign Minister Laurent Fabius said Thursday, although interim leaders must first take control of the south.

"Once the rule of law is re-established in the south, one must look at the north, meaning that at some point it's probable there will be use of force," Fabius told journalists in Paris.

An Islamist rebel group in northern Mali said Thursday it had freed three of seven Algerian diplomats kidnapped during the takeover of the city of Gao in April.

"We eventually agreed to free three of the seven hostages with us," said Adnan Abu Walid Sahraoui, spokesman for the Movement of Oneness and Jihad in West Africa (MUJAO), without specifying when they were released.

The Islamists controlling northern Mali on Tuesday destroyed two tombs at the ancient Djingareyber mud mosque in Timbuktu, an endangered world heritage site, witnesses told Agence France Presse.

"Currently the Islamists are busy destroying two tombs of Timbuktu's great Djingareyber mosque. They are shooting in the air to chase away the crowd, to scare them," one witness said.

Mali's transition government on Monday announced the creation of an elite force of 1,200 troops to protect the leaders of the country's embattled interim regime.

"Under the direct authority of the president, these special forces will assure the security of the head of state, the prime minister, the speaker of the national assembly and other state institutions," said a statement from the communications ministry.

West African presidents met Saturday with Malian civil leaders in a bid to secure a national unity government that can tackle a power grab by Islamist militants in the country's desert north.

However, Mali's president and prime minister were not there, northern representatives walked out, and supporters of the military coup that threw Mali into turmoil in March staged a counter demonstration.

Protesters from northern Mali demonstrated in the capital Wednesday against Islamists who have enforced strict sharia law, destroyed ancient shrines and trapped residents with landmines.

Some 2,000 people braved pouring rain to join the sit-in protest at Banako's Independence Square monument, chanting: "We want weapons to liberate the north."

French Prime Minister Jean-Marc Ayrault on Tuesday reiterated his government's determination to prevent groups like al-Qaida setting up "international terror bases" in rebel-held north Mali.

"Our determination will be total in preventing groups like AQIM (Al-Qaida in the Islamic Maghreb) setting up international terror bases that threaten the peace and prosperity of the whole region and our security too," he said.

France said Tuesday it was confident that the United Nations Security Council would soon pass a resolution authorizing a west African force to fight rebels holding northern Mali.

"We are confident it will be adopted," said Foreign Minister Laurent Fabius.