Libyan government forces in trucks disguised with rebel flags have shelled opposition positions near the strategic eastern oil town of Brega, killing 13 rebel fighters and wounding dozens more, officials said.
Rebel forces have been pushing to seize the frontline town, which is home to an oil refinery and terminal, for nearly a week, but they say minefields planted by Gaddafi's forces have slowed the advance.
They took positions 10km east of the oil port, working to clear the mines so they can move forward.
"Maybe within three or four days we will solve this problem of mines and we will be in Brega," said rebel spokesman Ahmed Bani.
Al Jazeera's Anita McNaught reporting from the area says rebels thought their position was betrayed by "spies and traitors" within their camp but they were certain those disloyal to the cause would be rooted out.
The rebels are fighting in a residential area on the town's eastern side and control about one-third of the town, another rebel spokesman said.
A doctor at the hospital in the nearby city of Ajdabiya said a lot of severely injured fighters were taken there on Tuesday, most of them with head and chest injuries caused by gunshots and explosions.
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"The numbers of casualities exceeded the numbers of beds available," said Hiba Shasha.
Another doctor at the same hospital said eight rebels were killed and dozens wounded on Tuesday, raising the total to at least 34 rebels killed in five days of fighting.
He said the rebels had taken four prisoners, and one dead government soldier had been taken to the rebel hospital. It is unclear how many other government soldiers have been killed.
The Libyan government rarely provides information on its casualties.
In an audio message directed at a rally of thousands in the town of al-Aziziya, south of Tripoli, Muammar Gaddafi emphasised the importance of Libya's vast oil wealth to his regime, and called the civil war a battle "for our way of life."
Waving the green flags and chanting "Only God, Muammar and Libya" the supporters gathered in the town main square. The embattled leader remains fiercely popular in certain sections of the country.
Gaddafi addressed the crowd vowing to fight on till the end: "We are in our homes, on our land, we will fight; we will defend, with men, women and children."
The rally was the fifth in 12 days, staged to show Gaddafi's support in the towns he still controls.
Rebels struggling to oust Gaddafi since the uprising against his rule broke out in February control much of Libya's east, but Brega has been under government control since early April.
The two sides have been locked in a stalemate with the rebels unable to advance beyond pockets in the west despite a NATO air campaign against Gaddafi's forces.
Last week, more than 30 nations gave the rebels a boost by recognising their National Transitional Council as the country's legitimate government, potentially freeing up billions of dollars in urgently needed cash.