Libyan fighters loyal to the National Transitional Council are regrouping for another assault on Muammar Gaddafi's hometown, Sirte.
Meanwhile, forces loyal to Gaddafi have fired rockets and scored casualties in their fierce counter-attack in the fugitive ex-Libyan leader's stronghold of Bani Walid.
Ambulances rushed dead and wounded fighters as explosions and gunfire thundered in the air, after the attack on a position of NTC fighters several kilometres from the city centre.
Troops gathered 5km away from Sirte on Saturday and packed their pick-up vehicles with weapons in advance of another day of fighting.
Al Jazeera's Hoda Abdel Hamid, reporting from Ras Lanuf near Sirte, said it had been very difficult for some 6,000 NTC fighters to get inside the town.
"In the east, they have not been able to even get close to town. The fighters here have heavy weaponry - tanks, heavy artillery - but they are still not able to advance," she said.
"There is a propaganda campaign by Gaddafi forces that seems to be working well for their camp. People are afraid of the NTC fighters."
Moussa Ibrahim, Gaddafi's spokesman, claimed NATO had carried out extensive air strikes on Sirte, killing 354 people overnight. He said Gaddafi was personally leading "all aspects of the struggle".
In a call to the Reuters news agency on Saturday, Ibrahim said: "NATO attacked the city of Sirte last night with more than 30 rockets directed at the city's main hotel and the Tamin building, which consists of more than 90 residential flats.
"In the last 17 days, more than 2,000 residents of the city of Sirte were killed in NATO air strikes."
The claims could not be verified independently, as Sirte has been largely cut off from communication since the fall of Tripoli last month.
"We are aware of these allegations," Colonel Roland Lavoie, spokesman for the Western military alliance, said in Brussels."It is not the first time such allegations have been made. Most often, they are revealed to be unfounded or inconclusive."
While battles raged, anti-Gaddafi commanders said they were close to reaching a surrender accord with leaders of the Hirawa region, about 80km east of Sirte.
If the Harawa deal is reached, it would open a new pathway into Sirte for revolutionary forces, but Gaddafi's spokesman, Moussa Ibrahim, claimed loyalists are in no danger of losing the city.
Supporters of Gaddafi put up fierce resistance on Friday against offensives trying to storm two of the deposed Libyan leader's last strongholds, Sirte and Bani Walid.
Loyalists forced NTC fighters into retreat in the mountains, and turned Sirte into an urban battlefield.
In Sirte, Gaddafi's birthplace on the Mediterranean coast, his backers rained gunfire down high-rise buildings on fighters pushing into the city from the west, while in the streets the two sides battered each other with high-calibre machine guns, rockets and rocket-propelled grenades.
In the mountain enclave of Bani Walid, about 140km southeast of Tripoli, NTC forces pulled back after a day of intense fighting that failed to dislodge pro-Gaddafi sharpshooters in strategic positions.
Al Jazeera's Anita McNaught, reporting from Wishtata about 50km from the centre of Bani Walid, said there had been no fighting planned for Saturday on that front.
"Today is for consolidation and lessons learned from yesterday," our correspondent said, after speaking with a senior NTC commander.
She also said yesterday's fighting "ultimately achieved little more than getting people killed and demonstrating the strength of pro-Gaddafi forces".
Reportedly, Gaddafi has at least three brigades dug in deeply at Bani Walid, laying traps for the NTC fighters. As a result, our correspondent said, "the NTC fighter command insists on taking things slowly, asking for more time to co-ordinate, to re-deploy and to organise".
The whereabouts of Gaddafi and at least two of his sons remain unknown.
The new leadership has been gaining international support in their campaign to root out the rest of Gaddafi's government and to establish their authority, with high-profile visits on Thursday by the French president and British prime minister, and on Friday by the Turkish prime minister, Recep Tayyip Erdogan.
Erdogan joined Friday prayers in Tripoli's Martyrs' Square, in the heart of the city.
The public square was earlier known as Green Square, and was the site of rallies held by Gaddafi forces before he was forced to flee the city.
On the political front, the UN gave Libya's seat to the transitional authorities on Friday, bringing recognition of Gaddafi's government to a formal end.
"We're hoping that very soon a first government will be announced," Ian Martin, UN special adviser for post-conflict planning in Libya, told Al Jazeera.
"High priorities for [the NTC] and for us are preparation for elections, assistance with restoration of public security, transitional justice ... how Libya will come to terms with grave human rights abuses and the promotion of national reconciliation."