An explosion shook the largest city in northern Mali in the early hours after Islamist gunmen battled French and Malian troops following two straight days of suicide bombings.
Malian troops told an AFP correspondent the blast appeared to have been in the north of Gao, possibly near the checkpoint at its northern entrance which was the target of suicide attacks Friday and Saturday.
The latest incident came a month into the French campaign to chase Islamist fighters out of the north of the country where they had imposed a brutal form of Sharia law for 10 months.
Sunday's attack by Islamist gunmen on territory reclaimed by French-led forces was the first large-scale urban guerrilla assault of the conflict.
It started early in the afternoon when Malian soldiers clashed with Islamists in the city centre, near an empty police station which the rebels had used as their base until being driven from the city last month.
Residents ran for cover as Kalashnikov bullets and 14.5-millimetre rounds pierced the air.
One witness said that after a fierce gunbattle, French troops had intervened. He reported seeing one body, which he thought was probably a civilian caught in the crossfire.
Rocket-propelled grenade explosions and fire from heavy machine guns and light weapons resounded late into the afternoon before dying down in the evening, when a power cut plunged the city into darkness.
French and Malian forces conducted joint patrols, warning residents that snipers could be hidden in the city, as a French Tiger attack helicopter circled overhead.
Colonel Mamadou Sanake of the Malian army said the rebels had infiltrated the city by motorcycle and via the Niger river, which passes near the governor's offices where some of the fighting took place.
One security source said several dozen insurgents had been involved in Sunday's fighting and Sanake said many of them had been killed. AFP's journalists in the city were not able to verify this.
MUJAO, one of the Al-Qaeda-linked groups that seized control of northern Mali for 10 months in the wake of a military coup in March 2012, claimed the attack and a suicide bombing Saturday, its second in two days.
"The combat will continue until victory, thanks to God's protection," said spokesman Abou Walid Sahraoui. "The mujahideen are in the city of Gao and will remain there."
A French-led force on the ground, backed by French air power, has over the last month driven the Islamists from the cities that were once their strongholds into the desert wilderness.