Rebels fighting to encircle Muammar Gaddafi in Tripoli faced stiff resistance Monday, coming under rocket attack south of the capital as France said it has made indirect contact with Libya's regime.
The clashes occurred around Gualish, which the rebels overran four days ago as they launched a NATO-backed offensive aimed at pushing the front line closer to the capital.
"There is a battle in the mountain of Zarat, near Kikla (about 15 kilometres, nine miles) north of Gualish," said Wael Brashen who commands a small rebel unit in the area.
"Since 2:00 am, Gaddafi's forces have been striking intermittently with Grad rockets and 106-calibre anti-tank canons," he said, adding the rebels launched a counterattack after three hours.
Brashen said the shelling also targetted a road linking Kikla to Al-Assabaa, 17 kilometres (11 miles) from Gualish, from where the rebels had vowed to march to Gharyan, the last major city on the road to Tripoli.
"We are preparing for Al-Assabaa, we do not know when, but there will be a battle" very soon, said Colonel Juma Brahim who commands the rebel's operational headquarters in Zintan.
Rebels broke a weeks-long stalemate in the Nafusa mountain range last week, marching to the plains of Gualish, and also launched an offensive against the coastal town of Zliten.
Elsewhere, the rebels said Gaddafi loyalists killed four of their fighters and wounded 22 overnight in the town of Zliten, some 60 kilometres from Misrata, Libya's third city and the insurgency's main western stronghold.
The clashes flared in Souk al-Thulatha district near central Zliten.
"Four of our fighters were martyred and another 22 were gravely injured in clashes with loyalist forces," the statement said. Gaddafi's forces had used "heavy weapons and cluster bombs banned by international conventions."
NATO in its latest operational update said its warplanes on Sunday hit three multiple rocket launchers in the Zliten area and another three in Misrata, where it also struck eight artillery pieces, eight military vehicles and a tank.
The western alliance said it conducted 54 strikes on July 10.
It hit, among other targets, a military storage facility in Gaddafi's Al-Azaziyah complex in Tripoli, and three armed vehicles in Brega, a loyalist pocket in the rebel-controlled east of Libya, according to NATO.
On the diplomatic front, France said Monday it has made indirect contact with Gaddafi's regime, while denying reports it has begun direct negotiations with Tripoli.
Paris is a leading member of the NATO-led international coalition bombing Gaddafi's forces and a cheerleader for the rebel National Transitional Council (NTC) battling to overthrow his rule.
"France has always said it wants a political solution. There are no direct negotiations between France and Gaddafi's regime, but we pass it messages in liaison with the NTC and our allies," foreign ministry spokesman Bernard Valero said.
"These messages are simple and without ambiguity: any political solution must begin with Gaddafi's withdrawal from power and abandonment of any political role," he added.
France was reacting after Gaddafi's son Seif Al-Islam was quoted in an Algerian daily boasting that Tripoli was negotiating a way out of the conflict with Paris and not with the rebels.
Seif Al-Islam had also cited intelligence reports indicating that France is sending airborne troops to western Libya to fight alongside the rebels and attack Tripoli.
"We are in fact holding real negotiations with France and not with the rebels," he said during the interview with the Algerian daily El Khabar, adding Tripoli had received a "clear message" through an envoy who met with the French president.
Seif Al-Islam said French President Nicolas Sarkozy bluntly told the Libyan emissary: "We created the (rebel) National Transitional Council and without France's backing, money and weapons, it would not exist."
On Sunday, French Foreign Minister Alain Juppe said Paris would work with the African Union to find "political solutions" to the crisis, but insisted the ouster of Gaddafi was a "key point".
Last week, AU leaders meeting in Equatorial Guinea agreed on a framework accord proposed to the rival Libyan sides that calls for negotiations that would not involve Gaddafi and for the deployment of a peacekeeping force.
But the blueprint does not explicitly call on the Libyan leader to cede power as demanded by the rebellion based in the eastern Libyan city of Benghazi.