BAMAKO - Tuareg rebels said Friday they had rejected a deal with Islamist rebels to form a breakaway state in northern Mali because of their insistence on implementing sharia law.

The Islamist Ansar Dine (Defenders of Faith) have refused to back off from their demand for the implementation of radical Islamic law, which the rebel National Liberation Movement of Azawad (MNLA) has already rejected.

"The MNLA's political leadership, faced with Ansar Dine's intransigence on applying sharia law in Azawad, and to remain faithful to its resolutely secular position, rejects the deal dated May 26, 2012 made with this group and declares everything pertaining to it null and void," said a statement.

The document, dated Thursday and signed by senior MNLA member Hamma Ag Mahmoud in Azawad's capital Gao, was the first official confirmation of the rebels' rejection of the accord.

The rival groups, who seized main cities in northern Mali after a March 22 coup in the southern capital Bamako, hold separate ideologies and objectives and the relationship has been an uneasy one.

A brief bid to merge the two groups quickly dissolved over Ansar Dine's desire to impose radical Islamic rules on the state.

Mossa Ag Attaher, a Paris-based MNLA spokesman, said Friday they had "accepted the idea of an Islamic State but it should have been written that we will practise a moderate and tolerant Islam, with no mention of sharia.

"We are not ready to find ourselves closed-in by sharia from one day to the next," he added.

But while the MNLA was ready to fight Islamic terrorism, he said, the Tuaregs would not give up on their aim of an autonomous state of Azawad, their name for their homeland in northern Mali, an area larger than France.

The Tuareg separatists have already lost many fighters to Ansar Dine.

And one regional security source, speaking on condition of anonymity, said that the now-defunct merger with the Islamists had deeply divided the MNLA.

"The statement was released by MNLA members who are outside the country, not those who are in place, followed by the majority," the Nouakchott-based specialist pointed out.

In Timbuktu, an ally of Ansar Dine leader Iyad Ag Ghaly, confirmed the breakdown in the deal.

"We told the MNLA on Thursday that for us, the discussions are over. There is no going back," said Walil Ag Cherif.

But he too suggested that the France-based MNLA representatives were not saying the same thing as those based in Gao, in northern Mali.

The MNLA in Gao could not be reached for comment.

The Tuaregs, many of whom returned armed from fighting for Moamer Gathafi in Libya, in January revived a decades-old struggle for autonomy.

The rebellion in the north pushed back government troops and led to the coup that toppled the government in Bamako, as officers complained that they were not getting the resources they needed to fight back.

In the ensuing political vacuum the rebel forces quickly seized control of the northern half of the country.

But Ansar Dine, backed by Al-Qaeda in the Islamic Maghreb (AQIM) which has deep roots across the Sahel, then took the upper hand, sweeping into key cities such as Timbuktu and imposing sharia (Islamic) law.

Regional and Western leaders have long feared a breakaway state in Mali's restive north could become Al-Qaeda's main safe haven.

AQIM's top leader has already offered advice to Ansar Dine on creating an Islamist state.