Libyan rebels and forces loyal to Muammar Gaddafi battled for control of the strategic eastern town of Ajdabiyah on Sunday after government troops fought their way inside.
Ajdabiyah is the gateway to the rebels' stronghold of Benghazi, Libya's second largest city, and has been the launch point for insurgents during a week-long fight for the oil port of Brega further west.
Rebels said Gaddafi's forces killed at least four rebel fighters in the second day of fighting for Ajdabiyah.
"I saw the four this morning. Their throats were slit and they were all shot through the chest and dumped on the road. Their car was also riddled with bullets," said a rebel, Mohammed Saad, at a checkpoint on the eastern edge of Ajdabiyah.
Insurgent Hassan Bosayna said eight Gaddafi fighters and four rebels were killed in fighting on Saturday, with one of the rebels shot in the forehead by a sniper.
Another rebel, Muftah, said: "There are Gaddafi forces inside Ajdabiyah in sand-coloured Land Cruisers and we know there are Gaddafi snipers in civilian clothing in the city as well."
A Reuters reporter near Ajdabiyah's eastern gate heard shooting and artillery fire and saw plumes of black smoke, suggesting Gaddafi's forces had pushed towards the centre.
The mostly untrained rebels have tried to reorganise and re-equip but were unable to hold ground last week against Gaddafi's better-armed forces in the fight for Brega.
A high-level African Union delegation led by South African President Jacob Zuma was due in Tripoli on Sunday to try to kindle peace talks between the two sides.
South African officials said the delegation, which also included the leaders of Mauritania, Congo, Mali and Uganda, would meet rebel leaders in Benghazi after talking to Gaddafi.
Western officials have acknowledged that their air power will not be enough to help the rag-tag rebels overthrow Gaddafi by force and they are now emphasising a political solution.
But a rebel spokesman rejected a negotiated outcome in the conflict, the bloodiest in a series of pro-democracy revolts across the Arab world that have already dethroned the leaders of Tunisia and Egypt. Gaddafi has been in power for 41 years.
"There is no other solution than the military solution, because this dictator's language is annihilation, and people who speak this language only understand this language," spokesman Ahmad Bani told al Jazeera television.
Analysts predict a long, low-level conflict possibly leading to partition between east and west in the sprawling North African Arab country.
The fight for Ajdabiyah followed pitched battles on Saturday when rebels fought off a heavy assault by government forces on the besieged western coastal city of Misrata.
One insurgent said 30 of their fighters were killed but another said there were eight confirmed dead and 10 unconfirmed.
Rebels in Misrata, a lone rebel bastion in western Libya which has been under siege for six weeks, hailed more muscular Nato operations against Gaddafi's besieging forces.
The alliance confirmed an increased tempo of attacks and said it had destroyed 17 government tanks between Friday and Saturday, 15 near Misrata and two south of Brega.
Gaddafi's forces appear bent on seizing Misrata and crucially its port, which some analysts say is vital if Gaddafi is to survive because it supplies the capital Tripoli.
Rebel spokesman Mustafa Abdulrahman said by telephone that Saturday's Misrata fighting centred on a road to the port, where a Red Cross vessel brought in badly needed medical supplies earlier in the day.
A government-organised trip to Misrata revealed deserted streets and many heavily shelled buildings in the city's south.
As fighting raged on for the coastal town, where conditions are said to be desperate, a buoyant Muammar Gaddafi made his first television appearance for five days on Saturday.
Wearing his trademark brown robes and dark glasses, he was shown smiling and pumping his fists in the air at a school where he was welcomed ecstatically. Women ululated, one wept with emotion and pupils chanted anti-western slogans.
Gaddafi looked relaxed, confirming the impression among analysts that his administration has emerged from a period of paralysis and is hunkering down for a long campaign.
Nato's commander of Libyan operations said the alliance, which took over air strikes against Gaddafi on March 31, had destroyed "a significant percentage" of his armoured forces and ammunition stockpiles east of Tripoli.
Canadian Lieutenant General Charles Bouchard also accused Gaddafi's forces of using civilians as human shields, adding to similar charges made by other Western commanders.
"We have observed horrific examples of regime forces deliberately placing their weapons systems close to civilians, their homes and even their places of worship," Bouchard said in a statement on Saturday.
"Troops have also been observed hiding behind women and children. This type of behaviour violates the principles of international law and will not be tolerated."
Rebels say people are crammed five families to a house in the few safe districts in Misrata to escape weeks of sniper, mortar and rocket fire. There are severe shortages of food, water and medical supplies, and hospitals are overflowing.Reuse content