French and Malian troops were advancing on Gao on Friday and had taken the nearby town of Hombori. More than 9,000 refugees have fled northern Mali since the French joined the Malian troops in an offensive against Islamist groups on and Timbuktu is reported to be without water or electricity.
French and Malian soldiers were in control of Hombori, where two French citizens were taken hostage in November 2011, on Friday, local people said, while Malian military sources confirmed that their next target is Gao, which fell to the rebels early last year.
Troops who captured Diabaly on Monday were to head north-east to Léré and then on to Timbuktu.
But the Islamists blew up a bridge over the river Niger at Tassiga, cutting one of two roads that troops from Chad and Niger can take towards Gao.
Cases of acute malnutrition have been identified in the city, according to the Action Contre la Faim charity, which says that the Islamist group Mujao still controlled it on Friday.
Residents of Timbuktu report that water and power have been cut off for three days.
More than 9,000 refugees have fled to neighbouring countries, since 11 January when French bombing began, the UN refugee agency (UNHCR) revealed on Firday, bringing the number of refugees outside Mali to 150,000 while 230,000 are internally displaced.
Most are fleeing atrocities "attributed to the rebels linked to Al Qaeda", the UNHCR said, and the Islamists take food, valuables and vehicles off them.
Some 160 troops from Burkina Faso have taken over from the French at Markala, 270 kilometres north of Bamako, among the first of a 6,000-strong west African force that the UN has endorsed.
Reinforcements of several hundred troops and equipment are heading for a West African port on board the BPV Dixmude, a helicopter carrier that left the southern French port of Toulon on Monday.