Heavy fighting broke out in two of the last Libyan towns under the control of forces loyal to Muammar Gaddafi on Saturday.
Officials from the National Transitional Council say their troops were locked in street-to-street fighting in Bani Walid after they called off a temporary opportunity for their enemy to surrender.
Some interim government officials think Gaddafi could be holed up in the town, 150 kilometres southeast of the capital Tripoli.
Clashes also began on the outskirts of the ousted leader’s home town of Sirte. Witnesses reported that rocket, mortar and tank fire were exchanged.
NTC forces said they had experienced fierce resistance.
The fighting has claimed casualties.