Fighters with Libya's interim regime fighters were locked in fierce clashes Sunday, with Gaddafi loyalists putting up a stiff resistance in the oasis of Bani Walid, an AFP correspondent said.
The new leadership's forces are trying to gain new ground in Bani Walid, with some pushing further into the town while others gathered some six kilometres (3.7 miles) away from its centre.
A leader of the National Transitional Council (NTC) fighters told AFP that the battle resumed at midday after unrelenting clashes from midday the day before until early dawn.
"There is an unconfirmed number of wounded from today's fighting," Dr Mabruk Kornfan said on Sunday.
Correspondents said they could hear loud explosions and intermittent gunfire from inside Bani Walid, and rockets exploded near NTC positions on the town's outskirts.
Some fighters were seen coming out of the town with prisoners from the loyalist ranks of fugitive fallen leader Muammar Gaddafi, as residents of Bani Walid also escaped to safety.
"There is no electricity and no food in the town," Mohammed al-Khazmi told AFP as he fled with members of his family.
"There are many rebels inside fighting forces loyal to Gaddafi, but they are meeting stiff resistance," he added.
At least seven NTC fighters were reported killed over the past two days in Bani Walid, 180 kilometres (110 miles) southeast of Tripoli.