At least five people were killed when a mortar bomb fired by the rebels into the city centre landed among terrified residents just a few hundred metres from the US embassy.
Tens of thousands of terrified civilians have meanwhile flocked to the heart of the city to escape the fighting, distraught that promised regional peacekeepers had failed to show up in time to prevent a third rebel assault on Monrovia in the past one month.
The earlier two rebel raids on the capital had left hundreds of civilians dead.
Defence Minister Daniel Chea said government troops were successfully thwarting the rebel advance.
“Our men have advanced across the bridges now to Vai Town, and they have pushed the rebels back,” the minister said.
The capital however continued to be shelled by the rebels intermittently through the day.
The rebels belonging to the Liberians United for Reconciliation and Democracy(LURD) and another group known as Model are pushing towards the capital with a view to oust President Charles Taylor.
But Taylor is defiant and says he will fight the rebels till the very end.
On Thursday, he strongly criticized the United States for pressing him to resign and said he would fight the rebels street by street, to the very last man.
Indicted by a UN war crimes tribunal, Taylor had earlier agreed to step down and seek asylum in Nigeria after US peacekeepers arrive in Liberia.
The deployment of peacekeepers is however delayed, allowing the rebels and Taylor’s forces to battle each other again in violation of a truce signed last month.