Two key rebel movements in Mali have agreed to join forces, saying together they will rule an independent Islamic state.

The Tuareg group MNLA and the Islamist group Ansar Dine occupying northern Mali reached the deal after a series of talks, according to both groups.

"The Ansar Dine movement and the National Movement for the Liberation of Azawad, MNLA, have proclaimed an independent state, Azawad," MNLA Col. Abdou Haidara announced.

Gunfire was heard in two major towns in the region -- Gao and Timbuktu -- as militants celebrated their decision to form a body to oversee Azawad. Several weeks ago, rebels declared independence for the region, the cradle of their nomadic civilization.

"It's time for its independence," said Moussa Ag Assarid, spokesperson for MNLA.

But not everyone celebrated the news Sunday.

The government in the capital, Bamako immediately rejected the new state.

And some who come from the region occupied by rebels said the separatist and Islamist movements do not have the people's support.

The rebels reached their agreement in Gao, a town in the north where leaders have been meeting.

Hassan Ag Mohamad, a former Ansar Dine official, said the two groups are now one. "Before we were Ansar Dine and MNLA. Now it's all the same."

As gunfire rang out Saturday evening, people afraid of clashes between the two movements immediately returned to their homes.

"I was very afraid when they started shooting, and it was only later I realized the militants were celebrating," said Gao resident Haraji Baber.

An hour later came reports of shooting from Timbuktu, one of the three major towns in what the rebels call Azawad.

The agreement between the secular Tuareg and the Islamists comes after weeks of sometimes heated discussions between two movements, separated both in their objectives and ideologies. While the MNLA is fighting for an independent Azawad, Ansar Dine's main objective is to impose Sharia law in all of Mali.

In the besieged towns, drinking, smoking, listening to music, watching soccer on TV and playing video games have been banned in what now seems to be a preparation for the creation of an Islamic state.

"We are all in favor of the independence of Azawad. We accept Islam as the religion but other religious views will be accepted," said MNLA's Haidara.

"In Azawad 99% are Muslim. Therefore the religion is Islam," Assarid said.

The U.S. government's CIA World Factbook says Mali's population is 90% Muslim, and 1% Christian, while 9% hold "indigenous beliefs." It does not give a religious breakdown for just the northern section.

"People are very happy, they have waited a long time for this," said Mohamad.

Some former officials in the region disagreed.

"Nobody in Gao can accept this convention. I can't accept it," said Sadou Diallo, the mayor of Gao.

Since MNLA took his town, the mayor is a refugee in Bamako.

"This declaration marks a major turning point for northern Mali. Since the March coup, the area has slipped out of the government's control. Now there's no turning back. People have no choice but to accept the rebels and the Islamist decision. They have no way of defending themselves. I believe Gao is lost."

Diallo added that he is very disappointed by the government's inability to free the region from occupiers.

All neighboring countries and international bodies have previously denounced the rebels' call for independence.