Rebel fighters pushed government troops back about 7 km from their previous positions, fixing a front line about 5 km north of the village of Bir Shuaib, near a diaper factory.
They set up a checkpoint on the road there and about 150 fighters gathered, some firing weapons in the air to celebrate their advance.
Rebels said it had been a heavy battle, with pro-Gaddafi forces using anti-tank guns. A medic said three rebel fighters were wounded in the battle, but none were killed.
Rebels advancing from the mountains southwest of the capital hope to reach Zawiyah, cutting off the coastal highway to Tunisia that links Tripoli with the outside world, and putting unprecedented pressure on Gaddafi's bastion in the capital.
Government troops withdrew after six hours of fighting, the rebels said.
"God willing, we will be attacking Zawiyah in one or two days," said rebel commander Mokhtar Lakdar.
"We are hoping to go to Zawiyah soon," said 17-year-old fighter Mohammed Al-Riffi. "We are just waiting for help from NATO and more ammunition."
Judging by impact craters, wrecked buildings and burnt-out tanks, warplanes of the western alliance have bombed and rocketed government military targets on the route of the rebel advance over the past week, providing close air support.
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