Fighters backed by Libya's new rulers pulled back from the Gaddafi loyalist stronghold of Bani Walid on Saturday saying they expected NATO air strikes, but the Western military alliance denied it had told them to retreat.

"Field commanders have told us to retreat because NATO will be bombing soon," fighter Abdul Mulla Mohamed said, driving away from the town, which is held by Muammar Gaddafi's forces, in his pickup truck.

Several other fighters leaving the scene also said they expected a NATO strike. A Reuters reporter saw dozens of vehicles pulling back from the town.