Al Jazeera correspondents reported on Saturday that fighters aligned with the National Transitional Council (NTC) were seeking to wrest control of Bani Walid, Sirte and Sabha from Gaddafi loyalists after the latter chose to ignore the deadline for surrender.
With talks aimed at peaceful handover of the Gaddafi strongholds collapsing, NTC Chairman Mustapha Abdel Jalil, the interim leader of the country, said on Saturday afternoon the situation was "in the hands of [his] battlefield commanders".
Al Jazeera's David Poort, reporting from the outskirts of Bani Walid, said NTC fighters seeking to advance to the centre of the town, 150km south of the capital Tripoli, were coming under sniper fire from Gaddafi loyalists.
Abdullah Kenshil, the NTC's spokesman and chief negotiator, said the anti-Gaddafi fighters were exchanging fire with gunmen positioned in houses in the town of Bani Walid and the hills that overlooked it. "They are inside the city. They are fighting with snipers ... They forced this on us and it was in self-defence." Kenshil said that Gaddafi forces in Bani Walid had received reinforcements during the night.
Al Jazeera's Sue Turton reported that there seemed to be more pro-Gaddafi fighters in Bani Walid than expected, possibly coming in from Sirte, Gaddafi's hometown. "This is a surprise as it was thought that the rebels had cut off that link between the two towns," she said.
Amid the continued fighting, NATO carried out at least five air raids on the town, the Reuters news agency reported.
Ambulances transferred casualties from Bani Walid, as NTC fighters grabbed crates of rocket-propelled grenades and mortars and raced to the front.
Tariq Zbida, a Bani Walid resident who has joined the ranks of NTC fighters, told Al Jazeera's Poort the fight for the town was "far from over". He said Gaddafi loyalists still holding out inside the town"were tough and would not go down without a fight".
Fierce battles were also being fought over Sirte and the southern desert town of Sabha.
In Teassain, 90km east of Sirte, witnesses told the Reuters news agency they saw heavy rocket exchanges between NTC forces and Gaddafi loyalists.
The NTC had given Gaddafi loyalists until midnight Friday to give up peacefully or face attack, although previous deadlines had been extended to allow more time for negotiations.
Gaddafi's location has been unknown since Tripoli fell to opposition fighters on August 23 after a six-month civil war.
Gaddafi insisted in a defiant audio message broadcast on Thursday that he was still in Libya to lead the fight against what he called the"rats" and "stray dogs" who had taken over Tripoli.
But four of his senior officials, including his air force commander and a general in charge of forces in south Libya, were among a new group of Libyans who had fled to neighbouring Niger, according to officials in Niger.
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General Ali Kana, the southern commander, and Ali Sharifal-Rifi, the air force chief, were among 14 Libyans who arrived in the northern Niger town of Agadez on Thursday after crossing the border in a convoy of four-wheel drive vehicles, they said.
A Reuters reporter in Agadez said the four senior men were at the luxury Etoile du Tenere hotel, said to be owned by Gaddafi, who himself stayed there during a holiday in 2007.
Niger, under pressure from Western powers and Libya's new rulers to hand over former Gaddafi officials suspected of human rights abuses, said it would respect its commitments to the International Criminal Court if Gaddafi or his sons entered the country.
"We are signatories of the [ICC's] Rome Statute so they know what they are exposed to if they come," Massaoudou Hassoumi, the head of the Nigerien cabinet, said.
He said the latest arrivals were "under control" in Agadez, through which the head of Gaddafi's security brigades, Mansour Dhao, passed earlier this week en route to Niger's capital, Niamey.
"We are taking them in on humanitarian grounds. No one has told us that these are wanted people," Hassoumi said.
Niger, which only this year returned to civilian rule and is fighting al-Qaeda-linked groups in its desert north, fears the Libya conflict might spill over, Hassoumi said.
"We have prepared for a worst-case scenario. For example, if Bani Walid and Sirte were to fall by force, it could cause a massive stampede of armed groups into Niger," he said.