Ivory Coast rebels seized a town on a main road on Friday, a day after recapturing the key western coffee centre, but French troops on the ground said they would halt the advance if the fighters came too far.
Military sources said rebels seized Bangolo, on the main road 50 km south of the key western town of Man.
Bangolo, which is north of French troops based in Duekoue, fell on today, they said.
A Bangolo resident said she could see fighters she believed to be rebels firing in the street outside her house.
French troops, who are in the West African country to protect foreign nationals and impose a cease-fire, said that if the rebels continued to advance they would be halted before they could reach the important cocoa town of Daloa.
French army spokesman Frederic Thomazo said the army's first mission was to protect foreign nationals and with that in mind French troops would stop rebels advancing across the Sassandra river halfway along the road between Duekoue and Daloa.
"The rebels will not pass the Sassandra," he said.
French soldiers have clashed with the rebels fighting in the west of the world's largest cocoa grower. Ten rebels were killed and one French soldier wounded during a battle for control of Man airport at the end of last month.
Ivory Coast's army spokesman Jules Yao Yao rejected claims Bangolo had fallen. "The rebels have not retaken anything, especially not Bangolo as we are keeping them penned in at Man."
Rebel commanders in the west of Ivory Coast could not immediately be reached for comment.