BAMAKO, MALI - French troops surrounded the desert village of Diabaly in central Mali on Wednesday, the first direct engagement since France launched a military assault last week to oust Islamists who have advanced to within 250 miles of the capital.

In waging ground combat, France is entering the comfort zone of the rebels, who know the desert terrain and are veterans of guerrilla warfare. They have melded into the local population, occupied houses and are hiding in mango groves to stage ambushes, residents said in telephone interviews.

"The jihadists are mixing with the people, moving around in small groups of five," said Salif Ouedraogo, an aid worker. "They are preventing people from leaving Diabaly. They want to use the people as human shields."

What began as a campaign of aerial assaults now appears to be expanding into a ground war, raising questions about France's military capability and political will to defeat the Islamists, a meld of Al-Qaida militants, religious zealots and criminals who seized a Texas-sized territory in northern Mali last March. While French forces have had experience combating guerrillas recently in Afghanistan, they have not played the lead role in a counter-insurgency campaign since France's colonial days.

An all-out attack on the town by French ground forces would sharply raise the risk of casualties and of criticism of the operation from within France, where leaders across the political spectrum so far have expressed support. Fighting would probably have to proceed at close quarters, house to house, robbing the French forces of their overwhelming technological advantage.

In the wake of a March military coup, the Islamists piggybacked on a rebellion by secular Tuareg separatists that drove out the government from northern Mali and divided the country into two. Weapons from the late Libyan leader Moammar Gadhafi's arsenals that were smuggled into northern Mali helped drive the rebellion.

But the Islamists quickly pushed out the separatists and imposed a harsh brand of Islamic sharia laws, marked by amputations, stonings and whippings. By the summer, three groups controlled the north: Ansar Dine, or "defender of the faith"; Al-Qaida in the Islamic Maghreb, the terror network's West and North Africa wing, and the Movement for Oneness and Jihad in West Africa.

Last week, the Islamists advanced southward and seized the town of Konna, prompting the French military assault.

The ineffective Malian military has been unable to retake Konna from the militants despite an intense campaign of French aerial assaults.