Libyan interim government forces charged back into the besieged desert town of Bani Walid on Saturday, a day after diehard loyalists of Muammar Gaddafi beat them back into a humiliating retreat.
Forces loyal to the new authorities were also battling Gaddafi loyalists on the streets of the ousted leader's home city Sirte. After days of battles, they celebrated the capture of the town of Herawa 60 km east of Sirte, but have made only slow progress against heavy resistance in Sirte itself.
Nearly a month since they drove Gaddafi's forces from the capital Tripoli, interim government fighters are bogged down in sieges of Gaddafi loyalists' remaining redoubts, raising doubt over whether they can quickly unite the country.
Gaddafi's spokesman said the ousted leader was still in Libya and leading resistance. Moussa Ibrahim also accused Nato of killing 354 people in an overnight bombing of Sirte, an accusation that Reuters could not independently verify. The alliance said such accusations in the past had been false.
A column of National Transitional Council (NTC) pickup trucks mounted with anti-aircraft machine guns and fresh ammunition rushed into Bani Walid as dusk fell, after Gaddafi forces shelled a checkpoint, Reuters reporters there said.
"Gaddafi forces attacked the checkpoint so our troops went in. There is a lot of fighting inside the city right now," senior regional NTC official Abdullah Kenshil said.
The day before, NTC fighters seeking to capture Bani Walid had beat an embarrassing retreat under withering fire.
In Sirte, NTC forces have entered the city from the west and captured nearby Herawa to the east, but have not been able to dislodge tenacious Gaddafi fighters.
Ibrahim, the deposed leader's spokesman, contacted Reuters by satellite telephone to say Gaddafi was still in Libya, leading the "resistance" against his foes.
"We will be able to continue this fight and we have enough arms for months and months to come," he said.
He said Nato air strikes on Sirte had hit a residential building and a hotel, killing 354 people. More than 700 people were wounded and 89 were missing from that bombing, he said, giving a total death toll for 17 days of more than 2000 killed.
There was no way to verify the account, as pro-Gaddafi-held parts of the city were inaccessible. Nato has repeatedly denied in the past that its bombing -- authorised by the United Nations to protect civilians -- has killed large numbers of civilians.
"We are aware of these allegations," Colonel Roland Lavoie, spokesman for the Western military alliance, said in Brussels. "It is not the first time such allegations have been made. Most often, they are revealed to be unfounded or inconclusive."
"Liberation" on hold
Nearly four weeks after Gaddafi's foes overran Tripoli, Libya's interim council is unable to declare all of the vast North African nation "liberated" and begin a timetable for drawing up a democratic constitution and holding elections.
Outside Bani Walid, NTC fighters blamed each other, their commanders and traitors for the previous day's defeat.
"When we entered the city, snipers shot at us from the front and traitors shot at us from the back," said fighter Abushusha Bellal. "They always play tricks and shoot us in the back."
One fighter, Nuraldin Zardi, told Reuters his unit had missed the order to retreat and had found itself trapped and isolated inside Bani Walid hours after their comrades had fled.
"We will not rely on our commanders any more," he said, reflecting growing dissent in NTC ranks. "We will do everything ourselves and take our own decisions."
The first of what NTC fighters said would be an extra 1,000 men from Tripoli and elsewhere began arriving near Bani Walid.
"We will burn you"
East of Sirte, NTC fighters danced in the streets of the town of Herawa, captured on Saturday after days of fighting. They sang "Gaddafi, we will burn you" and ripped down posters of the fugitive former strongman, stamping on his face in the dirt.
But after a mosque where they set up a base came under heavy fire the fighters scrapped plans to press on and reinforce comrades who entered Sirte from the west.
"Answer me! Answer me!" one pro-NTC fighter sobbed as he cradled the body of his friend, killed by shrapnel wounds to his head. Two other fighters were also injured.
In Sirte itself, anti-Gaddafi forces who entered from the west on Friday encountered fierce resistance. On the western highway leading to Sirte, a Reuters reporter said he could hear gunfire and shelling as NTC forces advanced into the city.
"Gaddafi's troops are between the houses, there are a lot of snipers on the roofs," NTC fighter Mabrook Salem said.