UPDATE 1-Mali Islamists counter-attack, threaten France
* Islamists attack town south-west of recent fighting
* Rebels threaten to strike at France, turn Mali into new Afghanistan
BAMAKO/PARIS, Jan 14 (Reuters) - Al Qaeda-linked Islamist rebels in Mali launched a counter-offensive on Monday after three days of strikes by French fighter jets on their strongholds in the desert north, vowing to drag France into a long and brutal ground war.
France intensified its air raids on Sunday using state-of-the-art Rafale planes and Gazelle attack helicopters to pummel training camps at the heart of the vast area seized by rebels in April, while pouring hundreds of its ground troops into the capital Bamako.
Paris is determined to end Islamist domination of northern Mali, which many fear could act as a launchpad for attacks on the West and a base for coordination with al Qaeda in Yemen, Somalia and North Africa.
Launching a counter-attack far to the southwest of recent fighting, the Islamists clashed fiercely with government forces on Monday in the central town of Diabaly, 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."
A spokesman for the MUJWA Islamist group, one of the main factions in the rebel alliance, promised French citizens would pay for Sunday's air strikes in their stronghold of Gao. Dozens of Islamist fighters were killed when rockets struck a fuel depot and a customs house being used as their headquarters.
"They should attack on the ground if they are men. We'll welcome them with open arms," Oumar Ould Hamaha told Europe 1 radio. "France has opened the gates of hell for all the French. She has fallen into a trap which is much more dangerous than Iraq, Afghanistan or Somalia."
France has said its sudden intervention on Friday, after Mali's president appealed for urgent aid in the face of a rebel advance, stopped the Islamists from seizing the capital Bamako. It has pledged to continue air strikes in coming days.
President Francois Hollande says France's aim is simply to support a mission by West African bloc ECOWAS to retake the north, as mandated by a U.N. Security Council resolution in December. Under pressure from Paris, regional states have said they hope to have soldiers on the ground in coming days.
France convened a U.N. Security Council meeting for Monday to discuss Mali.
Hollande's intervention has won plaudits from Western leaders but raises the threat level for eight French hostages held by al Qaeda allies in the Sahara and for the 30,000 French expatriates living in neighbouring, mostly Muslim states. Concerned about reprisals at home, France has tightened security at public buildings and on public transport.