Clashes between rival groups in northwestern Libya have left at least two people dead and another 36 wounded, sources say.

Fighters from the town of Gharyan and al-Asabia fired machine guns and rockets at one another on Friday, in what was the latest round of fighting between armed groups across the North African nation since the fall of Muammar Gaddafi last year.

Ismail Ayeb of the Gharyan force said his fighters had gone to arrest people suspected of having ties to the former Gaddafi government.

Interim defence minister Osama al-Juwali rushed to Gharyan, 80 kilometres south of Tripoli to try to halt battles between the militias of that town and neighbouring Assabia.

The shootout began when al-Asabia fighters refused to hand over the suspects in question. Ayeb said al-Asabia, 16km to the southwest of Gharyan, has yet to be properly searched and disarmed.

"The weapons weren't handed to the defence ministry or the government, nor the wanted people were turned in," he said.

"Here is a militia in al-Asabia whose chief is on the loose and is running the fighting with his followers and partners."

Away from the front lines of the battle, fighters from Gharyan were seen to be loading shells into a tank.

The air was filled with the sound of rockets being launched and mortars exploding in the distance.

Hospitalised fighters wounded in the clash accused the militia in Assabia of remaining loyal to Gaddafi's now deposed regime.

Gaddafi loyalists

Ayeb said the fighting was not along tribal lines, but about the continued presence of supporters of Gaddafi in al-Asabia.

"The fighting isn't between one tribe and another, al-Asabia and Gharyan tribes sat together in this hall, and they agreed to search and disarm the area and turn in fugitives," he said.

"Since 20 September the weapons weren't turned in nor the fugitives of Gaddafi's followers.

"Now it is the responsibility of the National Transitional Council and the defence ministry.It is important to put an end to all of these problems by detaining loyalists to the former regime and clean the area."

Since Gaddafi's death in October, militias have continued to clash over land and minor disputes. Often each side accuses the other of still supporting Muammar Gaddafi. Defence Minister, al-Juwali,  told the Reuters news agency that such accusations remain provocative after the eight month civil war that followed anti-Gaddafi protests last year.