Mali's Islamist rebels launch counter-offensive

BAMAKO, Jan 14 (Reuters) - Mali's Islamist rebels launched a counter-offensive in the central town of Diabaly on Monday after three days of French air strikes on their positions in the north, residents and Malian military sources said.

"The Islamists are fighting with the army inside the town," said one local resident. "They started to infiltrate the town last night by crossing the river in little groups." (Reporting By Adama Diarra and Tiemoko Diallo; writing by Daniel Flynn; editing by Richard Valdmanis)