Anti-government forces backed by rebel army troops are in control of the city closest to the capital Tripoli.
An Associated Press reporter who arrived today in Zawiya, 30 miles west of Tripoli, said forces loyal to long-time ruler Muammar Gaddafi are surrounding the city of 200,000. But anti-government rebels and troops allied with them are in control of the city centre.
Police stations and government offices have been torched and anti-Gaddafi graffiti is everywhere. Many buildings in the city are pockmarked by bullet holes.
"Gaddafi Out," chanted hundreds in the city centre, where army tanks controlled by rebels are deployed.
Gaddafi loyalists remain in control of Tripoli.
In earlier developments a member of the Benghazi city council said the Libyan cities under rebel control have appointed an ex-justice minister to lead a provisional government.
Fathi Baja said opponents of Libyan dictator Muammar Gaddafi named Mustafa Abdel-Jalil to the provisional leadership post.
Mr Baja said that Mr Abdel-Jalil was chosen by the committees running the eastern Libyan cities now in the rebellion's hands.
On Saturday, Libya's top envoy to the US also said Gaddafi opponents were rallying behind efforts to form an alternative government led by Mr Abdel-Jalil, who has criticised Gaddafi's brutal crackdown on protesters.
The uprising against Gaddafi began in Benghazi on February 15. The rebels now control most of the eastern half of the country.
And the UN Security Council voted unanimously to impose sanctions on Libyan leader, his five adult children and top associates.
Voting after a day of discussions - interrupted at times for consultations with home capitals - council members agreed to freeze the assets of Mr Gaddafi, his four sons and one daughter, and to ban travel by the whole family plus 10 close associates.