Rebels advanced west towards the birthplace of Libyan leader Muammar Gadafy today, firing mortars and heavy machineguns in sporadic clashes with loyalist forces.
Emboldened by Western-led air strikes against Gadafy's troops, the rebels took the town of Nawfaliyah and moved towards Sirte, Col Gadafy's home town and an important military base, in the sixth week of an uprising against his 41-year rule.
As the rebels pressed forward in the east, Gadafy's troops were patrolling an area near the centre of Misrata after shelling the previously rebel-controlled western city for days.
The government in Tripoli said it had "liberated" Misrata from rebels and declared a ceasefire there.
Diplomatic activity accelerated on the eve of a 35-nation meeting in London tomorrow to discuss the crisis in the oil-producing North African country.
Italy proposed a deal including a ceasefire, exile for Col Gadafy and dialogue between rebels and tribal leaders. The rebel leadership ruled out compromise with Gadafy's followers.
"We have had a vision from the very beginning and the main ingredient of this vision is the downfall of the Gadafy regime," spokesman Hafiz Ghoga told reporters in the rebel stronghold of Benghazi.
Qatar became the first Arab country to recognise the rebels as the sole legitimate representative of the Libyan people. Libyan state television called the move "blatant interference".
Russia criticised the Western intervention that has turned the tide in the conflict, saying it amounted to taking sides in a civil war and breached the terms of a United Nations Security Council resolution.
The French and British leaders called for supporters of Col Gadafy to abandon him and asked Libyans opposing him to join a political process to pave the way for his departure.
"Gadafy must go immediately," French president Nicolas Sarkozy and British prime minister David Cameron said in a joint statement. "We call on all his supporters to drop him before it is too late."
In the nine days since the start of the Western-led bombing, the motley volunteer force of rebels has pressed half-way along the coast from its stronghold of Benghazi towards the capital Tripoli and regained control of most major oil terminals in the Opec member state.
A US treasury department official said the rebels could sell Libyan crude without being subject to US sanctions if they conducted the transactions outside the National Oil Corporation and other entities in Col Gadafy's administration subject to sanctions.
With its finances under pressure, the rebel leadership said it hopes to restart oil exports within a week.
Some energy traders said that, sanctions aside, they could not touch Libyan oil because of shipping and legal risks.
Today the rebels met sporadic resistance as they continued their advance in convoys of pick-up trucks with machineguns mounted on them.
Just west of sandy, barren Nawfaliyah, bursts of sustained machinegun fire and the whoosh of several rockets could be heard, and plumes of black smoke rose ahead.
"Those are from our guns," said Faisal Bozgaia (28) a hospital worker turned rebel fighter, pointing to the smoke.
Rebels said occasional ambushes by Gadafy forces had pushed them back but that they later regained their positions.
"We are advancing one, two kilometres at a time," rebel Khalif Ali (22) said in the town of Harawah, west of Nawfaliyah.
But the rapid advance is stretching rebel supply lines.
"We have a serious problem with petrol," said a volunteer fighter waiting to fill up in the oil town of Ras Lanuf.
Reuters correspondent Michael Georgy, reporting from Sirte to the west, said he saw police and military but no sign of fighting.
Soldiers were manning checkpoints and green Libyan flags flapped in the wind. Militiamen fired AK-47 rifles defiantly into the air. "If they come to Sirte, we will defend our city," said Osama bin Nafaa (32) a policeman.
In Misrata, Gadafy soldiers manned checkpoints and took up position on rooftops. Some housefronts were smashed, smoke was rising from several areas and gunfire rang out constantly across the city.
Several civilians approached a group of journalists, some of them woman and children waving green flags.
"Civilians are happy," said an army official who declined to be named. "Everything you are hearing is a lie. The function of our army is to save the people and to protect the leader. We cannot kill our own people."
A rebel spokesman in another western town, Zintan, said forces loyal to Col Gadafy had bombarded the town with rockets early on Monday, Al-Jazeera reported.
Western-led air strikes began on March 19, two days after the UN Security Council authorised "all necessary measures" to protect civilians from Gadafy's forces. But from the outset, the mission has faced questions about its scope and aims, including the extent to which it will actively back the rebel side and whether it might target Col Gadafy himself.
The start of allied bombings proved a turning point for the rebels who were hemmed into Benghazi at the time.
Russia, which abstained in the UN vote, said Western attacks on Gadafy's forces amounted to taking sides.
"We consider that intervention by the coalition in what is essentially an internal civil war is not sanctioned by the UN Security Council resolution," foreign minister Sergei Lavrov told a news conference.
Nato chief Anders Fogh Rasmussen told the BBC: "We are there to protect civilians - no more, no less."
France, which dropped the first bombs of the campaign nine days ago, said the coalition was strictly complying with UN terms. It said its planes struck a command centre south of Tripoli belonging to Gadafy's forces yesterday and today.
The defence ministry in London said British Tornado aircraft destroyed Libyan government ammunition bunkers in the Sabha area of Libya's southern desert in the early hours of today.
"He (Gadafy) is still capable ... of inflicting further great bloodshed on the people of his own country. So we must maintain our efforts absolutely in line with international law," British foreign secretary William Hague told BBC television.
Yesterday, Nato agreed to take full command of military operations in Libya after a week of heated negotiations.
The United States, which led the initial phase, had sought to scale back its role in another Muslim country after the wars in Iraq and Afghanistan. An alliance spokeswoman said on Monday the transition would take a couple of days.
Libya accused Nato of "terrorising" and killing its people as part of a global plot to humiliate and weaken it.
The government says the Western-led air attacks have killed more than 100 civilians, a charge denied by the coalition which says it is protecting civilians from Gadafy's forces and targeting only military sites to enforce a no-fly zone.
Reuters