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Malian soldiers on Friday fired rocket-propelled grenades at the town hall in Gao, where armed Islamist forces had been holed up the previous day during heavy fighting, an AFP journalist reported.
It was not immediately possible to determine whether Islamists were still active inside the building in the northern town. A Malian soldier earlier said "many" bodies of dead fighters wore explosives belts, both in the town hall and the nearby court house.
He added that mines had been laid in the area.
According to the French army, between 15 and 20 Islamists were killed and two French soldiers "very slightly wounded" in fighting in central Gao on Thursday. "Four Malian soldiers are said to have been wounded," a French military source said.
Overnight Thursday and on Friday morning, shooting broke out in several parts of Gao, which lies in northern desert territory 1,200 kilometres (745 miles) from the capital Bamako.
In the city centre, notably at the main market, Islamist snipers were positioned on rooftops, an AFP journalist saw.
The Movement for Oneness and Jihad in West Africa (MUJAO), which occupied Gao for nine months before it was recaptured by French and Malian troops in a French-led offensive on January 26, said it had sent fighters into Gao to "free it from the evil-doers".
The Islamist movement said that the battle had "only just begun" to seize back control of Gao, Kidal and Timbuktu, the three main northern towns which fell to jihadist insurgents last year.