Rebels gather on the main road outside Sirte. (AP)
Anti-Gaddafi forces overran Sirte's port on Tuesday, but in the other stronghold of supporters of the ousted Libyan leader, the new regime's fighters were beaten back by fierce resistance.
On the political front, a member of Libya's new ruling National Transitional Council (NTC) said formation of a transitional government, already delayed by disputes over power-sharing, had been postponed until they had won control of the entire country.
In a radio message, Muammar Gaddafi hailed the resistance put up in Bani Walid, where the NTC admitted they had been forced back by forces loyal to the toppled strongman.
Capturing the port at Sirte marked a key victory in the battle for control of Gaddafi's birthplace, but intense fighting carried on inside the city.
Hundreds of fearful civilians have fled Sirte, a sprawling Mediterranean city 360 kilometres (225 miles) east of Tripoli, as the new regime's forces close in from east, south and west.
NTC fighter Fateh Marimri, who drove out of Sirte's eastern gate in what he said was a captured Gaddafi 4X4, reported fierce fighting around the Mahari Hotel.
"They are using heavy weapons but we are not, as we want to cause minimum damage to civilians," Marimri said.
"They are now fighting us in civilian clothes and there are African mercenaries everywhere in Sirte."
He also said Gaddafi's family members were inside Sirte, backed by a "large number of his forces", but did not give names.
"As we move closer to the city centre, it's going to be face-to-face street fighting and we are preparing for it," said another fighter, Ali Zaidi.
More than 10 NTC fighters had been killed there, one commander who did not want to be named told AFP.
Earlier Tuesday, Commander Mustafa bin Dardef of the NTC's Zintan Brigade said "there were clashes in the night and we now are controlling the port."
Dr Yusuf al-Badri said the overnight clashes were the fiercest so far in the battle for the city.
"Today's level of casualties was intense. We had some 40 fighters being treated of whom two died," he said, adding the average number of casualties in recent days had been about 20.
The port and university lie on the northeastern side of Sirte but Gaddafi's compound and military bunkers lie in the centre and NTC fighters said they expected the fiercest resistance there.
Fleeing residents said Gaddafi's forces had been trying to prevent people from leaving.
"There's no food, no electricity; we were eating just bread," Saraj al-Tuweish, who got out with his extended family on Tuesday, told AFP.
"I've been trying for 10 days to get out and every time the army forced us back.
"We would go the checkpoint and they would refuse, they would shoot in the air. Today we used a dirt road early in the morning and we managed to escape."
The lack of clean drinking water has triggered an epidemic of water-borne diseases. An AFP correspondent saw dozens of children being treated at a clinic in the town of Harawa, 40 kilometres east of Sirte.
"We have medicines but no nurses to treat the constant flow of patients, mainly children, suffering from vomiting and gastrointestinal diseases," said Dr Valentina Rybakova, a Ukrainian working in Libya for eight years.
"This is a big humanitarian crisis. We are trying to get help from everybody but the main problem is that these people have no access to clean drinking water."
As the fighting raged in Sirte, a group of fighters from the Zintan Brigade discovered a huge weapons cache in a village south of the city, one of them told AFP.
"The stock is massive. Around 100 houses in the village were full of all kinds of ammunition," said Maatiz Saad.
"The stock is so big that we would need hundreds of pickup trucks to load it and move it out. Ammunition was stored even in the village hospital. There are bullets for all kinds of guns and hundreds of rockets."
The claim could not be immediately verified.
In Gaddafi's radio message, a transcript of which was carried by a loyalist website, he said he was still fighting and was ready to die a martyr.
"Heroes have resisted and fallen as martyrs and we too are awaiting martyrdom," Gaddafi said.
He praised the fierce resistance put up in Bani Walid, which had been a major recruiting ground for his elite army units.
"You should know that I am on the ground with you," he said. "Through your jihad, you are imitating the exploits of your ancestors."
NTC forces said the fierce resistance of Gaddafi loyalists had stalled their offensive in Bani Walid.
"NTC fighters pulled out from some areas they control in Bani Walid due to the intensity of fire," said Abdallah Kenshil, the new government's chief negotiator in abortive efforts to broker the town's surrender.
In Benghazi, NTC member Mustafa al-Huni said Libya's new rulers had decided to postpone the formation of a transitional government until they had won control of the entire country.
On Saturday, NTC chief Mustafa Abdel acknowledged that "differences in views" between members of the NTC and the executive council had delayed a deal.
NATO meanwhile urged Libya's new regime to make plans to destroy stockpiles of chemical weapons and nuclear-related agents amassed by Gaddafi. Washington said Tuesday it was working closely with the new regime to secure all arms stockpiles.
In a letter to the UN General Assembly meanwhile, Venezuelan President Hugo Chavez, a staunch supporter of Gaddafi, said the Libyan conflict marked "a new cycle of colonial wars... with the sinister goal of refreshing the capitalist global system."