Islamists in northern Mali have stoned an unmarried couple to death, the first reported sharia killing since they occupied the area, ratcheting up pressure on an embattled interim government.

The execution came as interim President Dioncounda Traore finalised a unity government which foreign partners have demanded be formed by Tuesday to take decisive action against the jihadists who have cleaved the nation in two.

As politicians grappled for solutions in Bamako and west African capitals, the Al-Qaeda linked Islamists grew bolder, dragging a rural couple to the centre of the town of Aguelhok Sunday for a public stoning.

"I was there. The Islamists took the unmarried couple to the centre of Aguelhok. The couple was placed in two holes and the Islamists stoned them to death," said a local government official on condition of anonymity.

"The woman fainted after the first few blows," he said, adding that the man had shouted out once and then fallen silent.

A second official confirmed the information, saying the couple had two children the youngest of which was six months old.

"They were living in the bush, they were brought to town by the Islamists who stoned them to death. People came out to watch, there were witnesses," he said, also not wishing to be identified.

The small town in the region of Kidal near the Algerian border was one of the first to be captured by Tuareg separatist rebels on January 24.

Some 82 civilians and soldiers were summarily executed during the attack, France said earlier this year, accusing the rebels of using Al-Qaeda style tactics.

The Tuareg rebellion sparked a March coup by angry and overwhelmed soldiers, but the chaos only allowed the desert nomads and Islamists fighting on their flanks to seize the country's north, an area larger than France.

The Islamist groups, which experts say are acting under the aegis of Al-Qaeda in the Islamic Maghreb (AQIM) have since chased out the Tuareg separatists and are firmly in control.

In Timbuktu, they have also implemented strict Islamic law and destroyed ancient World Heritage sites which they consider idolatrous.

Once one of the region's stable democracies, Mali has crumbled into despair in half a year and the interim government which took over from the junta has been powerless in the face of the jihadist occupation.

The Economic Community of West African States (ECOWAS) wants to send a 3,000-strong military force to Mali but is waiting for United Nations approval and a formal request from a more inclusive government.

Traore on Sunday announced the creation of new bodies tasked with ending the crisis.

In a televised address to the nation, he announced he would be in charge of a High Council of State, lead talks for a unity government himself and create a committee to negotiate with the Islamists.

"Mali will not collapse," Traore said several times during his speech.

ECOWAS had ordered the authorities to form a unity government by July 31 or face sanctions but it reacted positively to Traore's latest measures Monday and said the deadline would be extended.

The 70-year-old was appointed in April as a junta led by Captain Amadou Sanogo which ousted the regime of Amadou Toumani Toure on March 22 handed power to a civilian transition government.

However on May 21 a mob of protesters stormed his office and beat him savagely. He returned Friday from France where he has been recovering since.

The High Council of State is designed to "complete the country's institutional architecture" and "adapt it to socio-political realities."

It will be made up of the interim president and two vice-presidents, one of whom will be in charge of defence and security and handling the crisis in the north. The other will represent the various non-political forces in Mali.

Traore also announced that "neither the president, nor the prime minister, nor the ministers, can run in the next presidential election."

Some observers saw the announcements as a sign Prime Minister Cheick Modibo Diarra was being pushed aside, after key political parties called for his resignation, accusing him of "incompetence and amateurishness"

"It is clear that with the new team, the prime minister's powers are really reduced," Malian sociologist Mamadou Diarra told AFP.

However Communications Minister Hamadoun Toure said this was a "false reading" of the president's speech.

Prime Minister Diarra, who has worked for NASA and was also the Microsoft chairman for Africa, is also seen as too close to the former putschists led by Sanogo.