French forces have continued to launch air strikes against Islamist militants in Mali and sent troops to protect the capital, Bamako.
French Defence Minister Jean-Yves Le Drian said rebels heading towards the central town of Mopti were attacked. A French pilot was killed, he said.
French troops were deployed on Friday after Mali's army lost control of a strategically important town, Konna.
Islamist groups overran huge areas of northern Mali last year.
One of the groups, Ansar Dine, moved further south into Konna on Thursday. But Mali's government said forces recaptured the town after the French air strikes.
Ansar Dine responded by threatening France with reprisals because of its intervention.
In a separate development, West African bloc Ecowas has authorised the immediate deployment of its troops to Mali.
In a statement, Ecowas Commission President Kadre Desire Ouedraogo said the decision was made "in light of the urgency of the situation".
A government official in Niger told Reuters news agency around 500 troops would be sent while AFP reported that Burkina Faso was sending a similar force.
The surge in fighting is the most serious since armed groups, some linked to al-Qaeda, took control of the whole of northern Mali last April.
Since then, two groups - Ansar Dine and the Movement for Unity and Jihad in West Africa (Mujao) - have sought to enforce an extreme interpretation of Islamic law in the area.
Regional and Western governments have expressed growing concern about the security threat from extremists and organised crime.
France's intervention in Mali began late on Friday afternoon, when helicopters were said to have opened fire on rebels heading south near Mopti.
The defence minister said on Saturday that hundreds of French troops were involved and many of them had been sent to the capital to provide security.
The minister said Paris had decided to act urgently to stop the Islamist offensive, which threatened to create "a terrorist state at the doorstep of France and Europe".
He also revealed that a French pilot was killed in Friday's fighting - during an air raid to support Mali's ground troops in the battle for Konna.
"During this intense combat, one of our pilots, Lieutenant Boiteux from the 4th helicopter regiment special forces, was fatally wounded," the minister said.
Hit by small arms fire, he had been taken to hospital in Mopti where he died of his wounds.
Speaking on Friday, French President Francois Hollande said the intervention complied with international law and had been agreed with Malian interim President Dioncounda Traore.
It would last "as long as necessary", Mr Hollande said.
French officials gave few operational details.
Residents in Mopti, just south of Konna, told the BBC they had seen French troops helping Malian forces prepare for a counter-offensive against the Islamists.
Mr Traore declared a state of emergency across Mali, which he said would remain in place for an initial period of 10 days.
He used a televised address to call on Malians to unite and "free every inch" of the country.
On Saturday, Mr Traore called Mr Hollande to thank him for the military intervention, the AFP news agency reports.
UK Prime Minister David Cameron also welcomed the French decision, saying he was "deeply concerned about the recent rebel advances".
The UN had previously approved plans to send some 3,000 African troops to Mali to recapture the north if no political solution could be found, but that intervention was not expected to happen until September.
French Foreign Minister Laurent Fabius said the aim of the current operation was to stop Islamist militants advancing any further.
It was not clear how far the French would go in helping Mali's government retake territory in the north.
At least seven French hostages are currently being held in the region, and Mr Fabius said France would "do everything" to save them.
Jean-Philippe Verdon, whose son is being held in Mali, told France 24 TV: "We are petrified; actions are being taken very fast and the situation is very intense."
A spokesman for al-Qaeda in the Islamic Maghreb (AQIM) said he considered the French operation a "crusader intervention", and told France it would be "digging the tombs of [its] sons" if the operation continued, according to the Mauritania-based Sahara Media website.
France ruled Mali as a colony until 1960.