Former rebels rest at the last former rebel's checkpoint between Tarhouna and Bani Walid, in Wai Dinar, Libya, Thursday, (AP).
NTC fighters claimed to have captured a key objective Thursday in their drive on Sirte, the hometown of fugitive Muammar Gaddafi, as the ex-Libyan leader dismissed as lies reports he had fled to Niger.
At the same time, talks on a peaceful surrender of the town of Bani Walid, held by Gaddafi loyalists, have ended without success, a National Transitional Council military chief said, raising the prospects of an assault on it.
The NTC has fixed a Saturday deadline for Bani Walid and other towns loyal to Gaddafi, including Sirte and the southern desert oasis of Sabha, to surrender.
"Our men took control of the Red Valley" at 2:45 pm (1245 GMT), Mustafa Bendaraf, an NTC commander on the front line, said of the region 60 kilometres (40 miles) east of Sirte.
The area was one of the main lines of defence of pro-Gaddafi troops.
An AFP correspondent in Umm Khunfis, some 30 kilometres away, reported hearing artillery fire in the distance.
On Wednesday, NTC forces captured the hamlet of Bou Saada, between Umm Khunfis and Sirte, and are massing in the area by the thousands as they ready for a possible assault.
An NTC commander at Rafa al-Jeibi, 150 kilometres northwest of Sirte, said: "We are awaiting the end of negotiations on Saturday. Until then, we won't move. We will defend ourselves if attacked, but that is all."
As for the talks on Bani Walid, which went on for several days, they "have stopped because there has been no result," Abdullah Abu Ussara told AFP.
"We are now waiting for instructions on our next move."
Former regime officials close to Gaddafi, including spokesman Mussa Ibrahim, are suspected of being holed up in Bani Walid, some 170 kilometres (105 miles) southeast of Tripoli.
It was hoped talks would lead to the surrender of the town, where the NTC fears civilians might be used as human shields by die-hard Gaddafi loyalists.
With remnants of Gaddafi's battered forces pinned down, Libya's new leadership and the United States urged neighbouring countries to close their borders to Gaddafi stalwarts.
The former leader, whose whereabouts are unknown, remained defiant in his first address for several days, telling his countrymen: "They have nothing else to resort to apart from psychological warfare and lies."
Speaking by telephone to Damascus-based Arrai Oruba television, he added: "They last said Gaddafi had been seen in a convoy heading towards Niger.
"They want to weaken our morale. Do not waste time on this weak and ignoble enemy."
Gaddafi also said NATO, which has carried out daily air raids against his forces under a UN mandate since March 31, "will be defeated" as its "logistical capacities will not allow it" to continue.
"We are ready in Tripoli and everywhere to intensify attacks against the rats, the mercenaries, who are a pack of dogs," he said.
Since his Tripoli headquarters was overrun on August 23, Gaddafi has made several appeals for resistance in tapes aired by Arrai, which is run by former Iraqi Sunni MP Mishan al-Juburi.
Juburi, the only media personality able to contact Gaddafi after Tripoli fell, said the ex-leader and his son Seif al-Islam were still in Libya.
"He is in Libya, in very good spirits, feels strong, is not afraid, and would be happy to die fighting against the occupiers," Juburi told AFP by phone.
The NTC fears Gaddafi will try to slip over one of Libya's porous borders, and Niger strongly denied he was in the country after a convoy carrying other senior ousted regime officials fled there on Monday.
The United States said Gaddafi was not believed to be among them.
In a bid to cut off Gaddafi's potential escape routes, the NTC said it had dispatched a team to the Niger capital Niamey, and Washington said Gaddafi aides who entered Niger were being detained.
None of those entering Niger earlier this week appeared to be on a list of persons subject to UN sanctions, State Department spokeswoman Victoria Nuland said.
"Our understanding is that the convoy included some military and senior officials under Gaddafi's former regime," she said. "They are now being held in the capital... and they are being monitored closely by Nigerien officials."
Also, Washington "is in contact with Mali, Mauritania, Chad and Burkina Faso to emphasise the importance of respecting the UN Security Council resolutions and of securing their borders," Nuland said.
Niger Foreign Minister Mohammed Bazoum, speaking in Algiers, said neither Gaddafi nor any other wanted fugitives had arrived in his country.
Rights group Amnesty International said Libya's neighbours must arrest Gaddafi and others wanted by the International Criminal Court (ICC) if they cross the borders.
"If they are found outside Libya, national authorities in that country must immediately arrest them and hand them over to the ICC to face trial for these crimes," said senior Amnesty director Claudio Cordone.
In that vein, ICC prosecutor Luis Moreno-Ocampo has asked Interpol to help, his office said, by issuing a "red notice to arrest Muammar Gaddafi for the alleged crimes against humanity of murder and persecution."
As the fledgling interim government struggles to get Libya back on its feet, the central bank governor said a sanctions-hit Gaddafi had sold 20 percent of the country's gold reserves, beginning in April.
Qassem Azzoz said Gaddafi had sold 29 tonnes of gold, worth more than $1 billion, to local merchants.
He also told a Tripoli news conference the bank's total assets stand at $115 billion, $90 billion of it abroad.
In other developments, the United States and the international community believe Libya's new rulers are responsible for preventing weapons proliferation in a region battling terrorism, said the top US general in Africa, Carter Ham.