Following intense fighting overnight, media reports on Monday said Libyan rebels have captured the strategic town of Garyan, which controls southern access to the capital, Tripoli.
But other reports said fighting was still ongoing in Garyan, as well as in the strategic port of Zawiyah, which sits along the coastal highway to Tunisia that is used to transport food and fuel supplies to Tripoli.
Reuters said that Libyan rebels raised their flag over Zawiyah, which is 50 kilometers west of Tripoli, on Sunday night following a dramatic advance.
But it reported that pro-Gaddafi forces were still patrolling the road between Zawiyah and the capital.
If the towns have fallen, it would mark a major psychological victory for the Libyan opposition.
The government of leader Colonel Muammar Gaddafi has denied a rebel victory, with spokesman Moussa Ibrahim insisting both Zawiyah and Garyan were under its “full control”.
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In an audio address following the rebels' advance Colonel Gaddafi promised to quash what he called opposition “rats” and “NATO colonizers”.
The Voice of Russia said that thousands of Libyan civilians were fleeing to Tunisia, with Ibrahim warning NATO forces against bombarding the Ras Jadir check point on the border.
Meanwhile Colonel Gaddafi's representatives are said to be in secret talks with the rebels on the Tunisian island of Djerba.
Neither party has confirmed the reports.