The deadline expires Saturday for forces loyal to ousted Libyan strongman Muammar Gaddafi to surrender, with fighters of the country's new leadership poised to attack hold-out strongholds.
After fierce clashes on Friday in Bani Walid, a Gaddafi bastion southeast of Tripoli, an AFP reporter on the town's eastern front at Sedata some 60 kilometres (40 miles) south of Misrata could hear distant artillery fire.
NATO aircraft could also be heard overhead early on Saturday, he said.
World police body Interpol called on Friday for the fugitive Gaddafi's arrest for crimes against humanity, following a request by the International Criminal Court, and there were reports a number of his generals had fled Libya.
The National Transitional Council (NTC) has set a Saturday deadline for towns still loyal to Gaddafi to surrender, and on-off talks have been going on for days over Bani Walid.
A number of former regime officials, including Gaddafi's spokesman Mussa Ibrahim, are believed to be holed up there.
On another front, NTC forces were massing on Saturday some 30 kilometres from Bani Walid, another AFP reporter said.
Fighters returning from the front reported clashes between NTC "sleeper cells" and pro-Gaddafi forces in and near the town overnight, and said they were reinforcing advance positions amid "fierce resistance" from diehards.
According to chief NTC negotiator Abdullah Kenshil, "the attack will take place, but its timing will be decided by military leaders on the ground."
On Friday, a top NTC commander said "decisive military action" was imminent.
"Up to now these negotiations did not lead to positive results," said Salem Jeha -- a highly influential member of Misrata's military council -- just hours ahead of the midnight deadline.
"If the negotiations fail then there will be decisive action, decisive military action," Jeha said from the NTC military headquarters in Misrata.
"But where this military action takes place, that is a surprise. We are in position and we can move in any direction and this is our strength."
Jeha, a former colonel in Gaddafi's army, said he expects resistance to be stiff but futile.
"What we know is that the remnants of Gaddafi's troops are fighting until the end to hold on to their territory. I am very sure that they cannot defend the positions they are in."
On Friday ahead of the deadline, fighting erupted in Bani Walid as pro-NTC elements inside the town clashed with Gaddafi forces.
One "revolutionary" fighter was killed and four wounded, while there were three deaths in the ranks of the pro-Gaddafi forces.
An NTC commander said earlier that "fierce fighting between our forces and pro-Gaddafi ones are under way in sectors very close" to Bani Walid.
Columns of smoke and the crump of shelling could be heard by journalists outside Bani Walid as convoys carrying fighters and ammunition headed for the town 170 kilometres (105 miles) from Tripoli.
Meanwhile, on the road to Gaddafi's hometown of Sirte, rebels who had captured Red Valley, 60 kilometres (40 miles) to the east on Thursday, were under counter attack, an AFP correspondent reported.
Speaking for the first time from Tripoli since it was captured on August 23, de facto premier Mahmud Jibril refused late Thursday to speculate on Gaddafi's whereabouts, but acknowledged the conflict would end only with the "capture or elimination of Gaddafi."
The NTC fears Gaddafi will try to slip across one of Libya's porous borders.
In a defiant message on Thursday, Gaddafi dismissed as lies reports he had fled to Niger, insisting he was still in Libya.
Niger, which has also denied that he is there, vowed to respect international commitments if wanted former Libyan officials enter its territory.
"We are not talking about (Muammar) Gaddafi, but about those who are already in Niger," Justice Minister Marou Amadou told AFP, insisting that "we do not know" the fugitive's whereabouts.
Niamey earlier confirmed having allowed a dozen Gaddafi aides, including internal security chief Mansour Daw, into the country for "humanitarian reasons."
They are being held under house arrest in Niamey.
Interpol said it had issued a "red notice" for the arrest of Gaddafi, his son Seif al-Islam and his intelligence chief Abdullah al-Senussi, a day after ICC prosecutor Luis Moreno-Ocampo asked for the agency's help.
On Friday, a source from Niger's ethnic Tuareg community in Niamey said a number of Libyan generals loyal to Gaddafi are now in Burkina Faso after transiting Niger.