Muammar Gaddafi's regime disputes rebel claims that they have taken the embattled oil hub of al-Brega, saying Libyan forces are still in control of the city.
Rebels have been fighting to regain control of al-Brega since they were forced to pull back in mid-March, then just weeks into the battle to end Gaddafi's rule over the North African nation.
"They are not in Brega," Libyan Deputy Foreign Minister Khalid Kaim told reporters Friday in Tripoli, CNN reports.
Kaim's comments follow claims by a rebel commander that opposition forces had pushed northward on three fronts toward the coastal cities of al-Zawiya, Aziziya and Sorman, with the aim of cutting off the road -- a main artery into Tripoli.
"In their dreams, it is possible," Kaim said.
CNN could not independently confirm early Saturday who was in control of al-Brega or whether rebel forces had advanced on the coastal cities.
An opposition newspaper, Qurayna New, citing medical sources at a hospital near al-Brega, reported at least six rebel fighters were killed and 16 wounded in fighting in the city.
Kaim on Friday criticized the United Nations for what he claimed was an organizational silence over claims that NATO has violated the mandate of the Security Council by killing civilians and conducting a naval blockade.
The comments follow a statement a day earlier by a spokesperson for Ban Ki-moon, who said the U.N. secretary-general "is deeply concerned by reports of the unacceptably large number of civilian casualties as a result of the conflict in Libya."
The rebels took over the residential zone of New Brega, about 15km from the central oil terminal and port area, on Thursday, Al Jazeera reports.
Mohammed Zawawi, the opposition spokesman, told Reuters on Friday it was still not safe to go into the city.
"Now we are trying to clear that area. There are some Gaddafi troops still there," Zawawi said.
Troops loyal to Gaddafi are holding on to the oil facilities and firing rockets at rebel positions, it says.
At least eight rebel fighters have been killed and another 25 wounded in the latest fighting.
"There's close fighting in the oil terminal area this morning, but maybe we can finish it off today," Mohammad Muftah, a rebel soldier, said.
It also emerged this week that the Gaddafi regime ordered U.K. diplomats to sell off assets - including mansions, expensive cars and even carpet - before being expelled from the country. (Read more on the desperate fire sale at GlobalPost.com)
NATO began airstrikes in support of the rebels in March after the U.N. Security Council approved a resolution that ordered civilians be protected.
This week, the government accused NATO of killing 85 civilians, including 33 children, in airstrikes on Monday near a key gateway to the rebel-held port of Misrata.
NATO has said there is no evidence that the strikes killed civilians, though journalists, including CNN reporters, taken by Gaddafi's government to the site of the strikes reported seeing bodies of women and children.
CNN could not independently confirm whether the casualties were the result of airstrikes.
The United States on July 15 recognized the rebel movement based in Benghazi as Libya's rightful government.