Libyan fighters say they have captured a valley leading to the center of Gaddafi stronghold Bani Walid on Friday.
The desert town of Bani Walid, 110 miles south of Tripoli, has been under siege for two weeks, with hundreds of die-hard Gaddafi loyalists refusing to surrender.
Anti-Gaddafi fighter Talal Fernan said: "We have cleared the valley leading to the city center," the Telegraph reports.
Truckloads of anti-Gaddafi troops shouting "Let's go! Bani Walid!" and a parade of pickup trucks mounted with anti-aircraft guns sped toward the town, Reuters reports.
"We are going in. We finally have the orders. God is greatest. God willing, Bani Walid will be free today," fighter Mohamed Ahmed said, his rifle sticking out of his car window, it reports.
Hundreds of fighters also advanced on Muammar Gaddafi's hometown of Sirte on Friday, with scores of trucks laden with machine guns and four tanks seen heding towards the town, Reuters reports.
This comes as British and French leaders David Cameron and Nicolas Sarkozy were hailed as heroes by anti-government protestors during their visit to Tripoli and the eastern city of Benghazi on Thursday.
But Col Gaddafi's spokesman Moussa Ibrahim said yesterday it was the start of the "colonization" of the oil-rich country.
Ibrahim, in a telephone call to the Syria-based Arrai late on Thursday said: "They are hurrying to collect the fruits of the fall of Tripoli ... because they obviously fear the arrival of America and other countries wanting a slice of the cake."
Gaddafi is believed to still be in Libya while his family has fled to Algeria and Niger.
"They hurried to Tripoli to make secret deals with the collaborators and the traitors, and to take the control of oil and investments under the pretext of rebuilding," Ibrahim said.
"They speak now about the construction of Libya for hundreds of billions of dollars ... they destroy it and rebuild it with the money of Libyans."
Cameron, while in Tripoli, said Britain would release £600 million in Libyan assets as part of a series of measures aimed at supporting Libya's new authorities.
He also said Britain would release another 12 billion pounds in frozen Gaddafi regime assets upon United Nations approval.