The Bamako government and armed groups from northern Mali launched tough talks in Algiers on Wednesday for an elusive peace deal, with parts of the country still mired in conflict.

The closed-door negotiations were to take place in the presence of six rebel groups, but they refused to meet simultaneously, according to an Algerian official.

Instead, the three groups that signed the "Algiers Declaration" in June, demanding inclusive peace negotiations, held a succession of brief meetings with the government delegation, with three other groups then holding talks.

Speaking beforehand, Foreign Minister Abdoulaye Diop, who heads the government negotiating team, said Bamako was prepared to go "as far as possible" within its "red lines" to strike a peace deal with the mainly Tuareg rebels and "forge an understanding between Malians."

"The government is ready to go as far as possible within the red lines that have been drawn," Diop said on Wednesday morning in Algiers.

Those red lines include "the unity of Mali and the republican form of the Malian state," he told AFP.

While separatist demands have officially been dropped by the rebel Tuareg groups attending the talks, they are demanding greater autonomy or a special status for northern Mali, known by the Tuareg as Azawad.

- Power-sharing consensus -

As Algerian officials have noted, the government would struggle to impose its terms, as the armed movements effectively control more than half of the vast Sahel country.

The parties needed to reach a power-sharing consensus between, "on the one hand, armed groups who want autonomy for northern Mali ... (and on the other) a government open to any idea except independence," an Algerian diplomat said on Tuesday.

After inflicting a "major defeat" on the Malian army in the Tuareg region of Kidal, the rebel movements now occupy nearly two-thirds of the country and come to Algiers "in a position of strength," the diplomat told journalists.

At least 50 soldiers were killed in the skirmishes in May between the army and a coalition of rebels from the National Movement for the Liberation of Azawad (MNLA) and the High Council for the Unity of Azawad (HCUA).

Those attending Wednesday's talks included the MNLA, the HCUA and the Arab Movement of Azawad (MAA), the three groups that signed the Algiers Declaration.

The other rebel movements present were an MAA splinter faction (MAA-dissident), the Coordination for the People of Azawad (CPA) and a third group, the Coordination of Movements and Patriotic Resistance Fronts (CM-FPR).

Mali has excluded several Islamist groups linked to Al-Qaeda which occupied northern Mali for close to 10 months before being ousted by the French-led Serval military offensive launched in January 2013.

- Goodwill gesture -

A ceasefire obtained by Mauritanian leader and African Union (AU) chief Mohamed Ould Abdel Aziz has been in place since.

On Tuesday, the two sides exchanged 86 prisoners in Bamako, -- 45 Malian soldiers and police and 41 Tuareg militants -- in a goodwill gesture on the eve of the negotiations.

The Algiers meeting brings together Mali's various warring factions for the first time since an interim agreement in June 2013 paved the way for nationwide parliamentary and presidential polls following a military coup the previous year.

President Ibrahim Boubacar Keita was elected in August, but peace talks have since stalled, and northern Mali has witnessed a spike in deadly violence by Islamist and separatist militants.

The United Nations peacekeeping mission in Mali, MINUSMA, has stressed the need for urgent action, with the security situation deteriorating and inter-communal violence in the north presenting a threat "more dangerous than anything else".

A French legionnaire was killed on Monday in what Paris described as a suicide car bomb attack near the northern town of Gao.

The talks began as French Defence Minister Jean-Yves Le Drian travelled to Bamako and signed a defence agreement with Mali, after Paris said on Sunday that it was winding up the Serval offensive after 18 months.

"This treaty will strengthen military cooperation between Mali and France in the fields of intelligence, training and information-sharing to ensure security on Malian territory and in the Sahel," Le Drian said in the Malian capital.

The French operation will be replaced by a wider counter-terrorism campaign, codenamed Barkhan, to be implemented in partnership with Mauritania, Mali, Burkina Faso, Niger and Chad. Some 3,000 French soldiers are expected to take part, 1,000 of whom will stay in northern Mali.