Libyan provisional government forces backed by NATO warplanes raced into the eastern outskirts of Sirte on Monday and fought street battles with Muammar Gaddafi loyalists.

Thick black smoke billowed into the air as National Transitional Council (NTC) fighters battled loyalist troops at a roundabout about 2 km from the centre of the deposed leader's home town, Reuters journalists said.

The thud of large explosions could be heard as NATO aircraft roared overhead. NTC fighters said the jets were striking the positions of Gaddafi loyalists.

NATO would not comment on its operations in Sirte on Monday. It said its planes hit eight targets on Sunday, including ammunition stores and rocket launchers.

NTC fighters fought with machineguns and rifles and moved tanks and heavy artillery into the town.

Anti-Gaddafi fighters west of Sirte had driven to within a few hundred metres (yards) of its centre on Saturday before pulling back on Sunday to make way for NATO strikes.

On the west of Sirte on Monday, NTC tanks shelled loyalist positions in the centre.

Interim government forces have previously retreated from Sirte and the other remaining Gaddafi stronghold, Bani Walid, after poorly organized attacks met fierce resistance from loyalists.