Government officials in Mali say a Tuareg rebel leader, Ibrahim Ag Bahanga, has agreed to free captured soldiers as part of a truce agreement.
A Tuareg splinter group had been ambushing government troops
The deal follows a meeting between the Tuareg dissidents and a delegation of Tuareg leaders loyal to the government.
Mali sent troop reinforcements to a base near the Algerian border after skirmishes with the rebels threatened to develop into insurrection.
The army said a soldier and seven rebels died in Sunday's rebel ambush.
Rebel groups rose up in Mali last year to press demands for inclusion in the political process and in the economic development of their desert region.
As the "Tuareg Alliance" they reached a peace deal with the government in July 2006.
Mali's government had accused Ag Bahanga of leading what it called "armed bandits", whose aim was to protect lucrative smuggling routes across the Sahara.