At least five people were killed and 35 wounded in clashes between Libyan pro-government forces and Islamist fighters in Benghazi, medics and military officials said.
Army special forces and troops led by former general Khalifa Haftar have been fighting to oust Islamist groups in the eastern coastal city since October and have managed to retake the airport area and army camps that were seized in August.
Islamist groups have managed to retain some control over the port and the Lithi residential area.
The fighting is part of a wider struggle for control of the North African country which sits on Africa's largest oil reserves. Former rebel groups which helped topple Muammar Gaddafi in a 2011, NATO-backed uprising now fight each other.
In August, Prime Minister Abdullah al-Thinni and his cabinet were forced out of Tripoli when a group called Libya Dawn seized the capital and they now operate from Bayda, east of Benghazi.
A new administration, not recognised internationally, has been set up in Tripoli.
Fadhal al-Hassi, a senior officer in Haftar's forces, said that pro-government forces moved into the Lithi district, where Islamist groups including Ansar al-Sharia are still mostly in control, according to military officials.
Medics at one Benghazi hospital told a Reuters reporter that at least five bodies had been brought in since the morning and that more casualties were expected as fighting still raging. About 500 people have been killed since October, medics say.
Security and the political situation in Libya has been complicated by the Benghazi fighting, where Haftar has merged his force with the army under a mandate from the elected parliament, which is allied to Thinni.
Libya Dawn says Haftar is attacking residential areas with aircraft and artillery, helped by Egypt. Both deny this.
Egypt's army toppled elected president Mohamed Mursi in 2013 and has cracked down hard on his Muslim Brotherhood supporters.