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A compact intrinsic fiber Mach-Zehnder interferometer (MZI) is proposed and experimentally demonstrated by incorporating a micro air-cavity ablated by femtosecond laser irradiation. A short cavity of length ~ 10 mum along the single-mode fiber core provided two optical paths: one propagating through the air and the other guided along the ring-shaped silica cladding. A spectral analysis confirmed MZI in a good agreement with experimental results. Temperature-dependent spectral shifts were measured and analyzed.