Forces loyal to deposed Libyan ruler Muammar Gaddafi, holed up in the city of Sirte, have been given a four-day deadline to surrender or face military action.
Mustafa Abdel Jalil, chairman of the rebels' National Transitional Council, said on Tuesday that forces loyal to Gaddafi, including those in the town of Sirte, had until Saturday to surrender or face a military assault.
"By Saturday, if there are no peaceful indications for implementing this we will decide this manner militarily," he said. "We do not wish to do so but we cannot wait longer."
Libyan rebel fighters have been massing outside Gaddafi's hometown of Sirte, preparing for an assault against his loyalists if negotiations with tribal elders fail to peacefully transfer control of the town over to the new government.
Fighters were organising their units to advance towards Sirte from Ras Lanuf and Bin Jawad in the east and from Tripoli and Misrata to the west.
"We will move further, but we will not enter Sirte now because it is not secured so far - there are ongoing
negotiations between tribe elders in Sirte and rebel leaders and we are receiving orders from our field
commanders and we are waiting for their commands," rebel fighter Taleb al-Karaty told the Reuters news agency.
Al Jazeera's Andrew Simmons, reporting from town of Kubris Isdada about 100km west of Sirte, said Libyan fighters faced artillery fire in the town of Alvishka when they pushed forward towards Gaddafi's hometown.
"After a small engagement they retreated, as forces loyal to Gaddafi had put up human shields around them," he said.
The Al Jazeera correspondent said, "Right now the fighters are engaged in scouting, probing and intelligence gathering in preparations for the ultimate push."
"There is a large unseen army with many tanks having been deployed in the desert and a whole range of armoury positioned around," he said.
Gaddafi loyalist captured at checkpoint outside Sirte
"They are applying a multi-pronged approach to the whole attack, if it takes place, and they [fighters] are moving to surround Sirte.
"Electricity and water supply has been cut, as a result the humanitarian situation in Sirte and surrounding towns is bad."
Senior rebel commanders said they estimated that they would come up against about 1,000 pro-Gaddafi soldiers if negotiations for the town's surrender fail.
In Sirte, forces loyal to Gaddafi urged people to fight or be killed, complicating efforts to arrange a peaceful surrender of the city, according to NTC officials.
Three days ago a message from Gaddafi was broadcast in Sirte, urging people to fight to save themselves.
While the deposed leader's whereabouts are still unknown, the city is a strategic and symbolic prize for Libya's rebel government as it tightens its grip on the vast North African country.
Another Al Jazeera correspondent Hoda Abdul Hamid, reporting from the village of Nawfaliya about 130km east of Sirte, said "I think there is a hope of a peaceful solution but realistically everybody says there won't be any. It will be another battle."
"Since this morning, there is a steady stream of tanks moving towards Sirte.
"Despite the negotiations for peaceful solution, several brigades have been massing to south of Sirte in anticipation of the final attack."
Gaddafi family members flee
The surrender deadline came after reports that some members of Gaddafi's family had fled the country and gone to Algeria.
Authorities there confirmed on Tuesday that Gaddafi's second wife Safia, his daughter Aisha, and his sons Muhammad and Hannibal were in Algeria and had been granted permission to enter based on "humanitarian grounds".
According to AFP news agency, Aisha gave birth to a girl while in Algeria.
Mahmoud Shammam, information minister in Libya's rebel government, told the Associated Press news agency that he considered Algeria's harbouring of Hannibal an act of aggression.
"I cannot confirm it, but I can comment that, especially for Hannibal, if he fled to Algiers and the Algerian authorities allowed him to do that, we'll consider this as an aggressive act against the Libyan people's wish," he said.
Meanwhile, in a big financial boost to the NTC, the UN agreed on Tuesday to unfreeze about $1.55bn worth of Libyan currency held in the UK, which can be used for humanitarian needs and to pay salaries of key public sector workers.
The Libyan Dinar notes were frozen by Britain after the UN Security Council imposed sanctions on toppled leader Muammar Gaddafi's regime in March.