Heavy clashes broke out today between rebels and loyalists fighting for control of Libya’s only functioning oil refinery in the western city of Zawiya, as the opposition tried to cut off fuel supplies to the regime’s stronghold of Tripoli.

LIBYA’S rebels have said their war against Muammar Gaddafi’s regime had entered a “decisive phase” and that victory was within reach by the end of August.

The United Nations’ special envoy for Libya is meeting representatives of both sides of the conflict.

Libyan government forces have tapped into their stores of Scud missiles, firing one for the first time in the conflict with rebels, but hurting no one, US defence officials said today.

Libyan rebels have fought their way into the strategic city of Zawiya west of Tripoli on in their most significant advance in months, battling snipers on rooftops and heavy shelling from Muammar Gaddafi’s forces holding the city.

Libyan rebel forces have seized control of a major mountain town which is a strategic gateway on the road to the capital, Tripoli, a rebel spokesman said today.

GENERAL Abdel Fatah Younis, leader of Libya's rebel forces, has been killed, according to the National Transition Council.

LIBYAN rebels have taken over the eastern oil hub of Brega, in their most significant advance in months against forces loyal to Muammar Gaddafi.

Representatives of Libyan leader Muammar Gaddafi's embattled government held face-to-face talks with US officials in neighbouring Tunisia over the weekend, a Libyan government official said today.

For three days running, the rallies have been carnival-like affairs with bands, horseback riders and even a camel dyed green.

LIBYAN rebel forces yesterday entered the oil town of Brega and fought street battles there with forces loyal to Muammar Gaddafi, a rebel spokesman said, in the biggest offensive in eastern Libya in weeks.

The Libyan leader Colonel Gaddafi has rejected the decision by the US and other countries to recognise the rebels fighting to oust him, and has vowed never to surrender.

Delegates from more than 30 countries have decided to recognise the Libyan opposition as the “legitimate authority of Libya”, according to the Italian foreign minister.

Delegates from nearly 40 countries seeking an end to the Libyan conflict met in Istanbul today to discuss more financial aid and diplomatic support to the country’s main opposition group as the rebels struggle to defeat Col Muammar Gaddafi’s forces.

Nato has denied a Libyan government charge that it is intentionally using its air strikes to help rebel advances, saying it is sticking to its mandate to protect civilians.

Libya's deputy foreign minister accused Nato today of intensifying its bombing campaign and backing foreign mercenaries to lay the groundwork for an advance by rebels trying to topple Muammar Gaddafi's regime.

A Nato air strike on a city near the front line in eastern Libya has killed 15 civilians, Libya’s state news agency claimed today.

The Libyan government said civilians were killed in a Nato airstrike that hit a residential neighbourhood in Tripoli, adding to charges that the alliance is striking non-military targets.

BRITISH jets hit a military barracks in the Libyan capital early yesterday, further intensifying NATO pressure on Libyan leader Muammar Gaddafi to end his 42-year rule.

NATO Apache combat helicopters have attacked targets during their first operation in Libya.

Libyan rebels clashed with Sudanese mercenaries fighting for Muammar Gaddafi near the border with Sudan today.

Nato must widen the target of air strikes in Libya to increase the pressure on the Gaddafi regime or risk allowing the dictator to cling to power, the head of the UK's armed forces said today.

Libyan leader Muammar Gaddafi taunted Nato, saying he was alive despite a series of air strikes and “in a place where you can’t get to and kill me”.

At least four Nato air strikes targeted the Libyan capital Tripoli early today.

THE western Libyan city of Misrata came under heavy bombardment yesterday by forces loyal to Muammar Gaddafi, a rebel spokesman said, a day after rebels celebrated a government pullback.

Government troops retreated to the outskirts of Misrata under rebel fire today and the opposition claimed victory after officials in Tripoli decided to pull back forces loyal to Muammar Gaddafi following nearly two months of laying siege to the western city.

REBELS came under fire on the outskirts of Ajdabiya, hemming them in to their eastern outpost and denting their hopes of pushing west to try to end a stalemate in the Libyan war.

Muammar Gaddafi's forces pounded Misrata - the only western city still in rebel hands - with rocket fire as weary residents who have endured more than a month of fighting lashed out at Nato for failing to halt the deadly assault.

Troops loyal to Muammar Gaddafi have unleashed heavy shelling on Misrata, pushing troops and tanks into the rebel-held western city, a witness said.

Heavy fighting raged for a second day around a key front-line city as rebels struggled to keep control of a buffer zone protecting their main eastern strongholds.

Libyan government forces shot down two US-built attack helicopters being used by rebel forces in the east of the country, the deputy foreign minister said today.

Rebel fighters in Libya said they have pushed deeper toward the oil port of Brega, a key prize in the back-and-forth battles with government forces.

LIBYAN government forces tried to storm into the besieged city of Misrata as NATO generals acknowledged their air power was not enough to help insurgents remove Muammar Gaddafi by force alone.

Nato has admitted its planes struck rebels using tanks in their fight with the government forces in eastern Libya.

An apparent Nato airstrike slammed into a rebel combat convoy, killing at least five fighters and sharply boosting anger among Libyan anti-government forces after the second bungled mission in a week blamed on the military alliance.

LIBYAN rebels claimed two of their fighters were killed and more than 12 injured after NATO airstrikes mistakenly bombed their forces yesterday as anger over the co-ordination effort escalated.

Libyan rebels have claimed that Nato air strikes hit their fighters on the front lines and touched off a retreat from the outskirts of the key oil port of Brega.

LIBYAN rebels have regained ground in a new advance but accused NATO of inaction hindering their quest to oust Muammar Gaddafi.

THE International Criminal Court has evidence that Muammar Gaddafi’s government planned to put down protests by killing civilians before the uprising in Libya broke out, the ICC’s prosecutor has said.

A tanker has arrived in Libya’s rebel-held port of Marsa el-Hariga to load up a shipment of oil for export, potentially giving opponents of Muammar Gaddafi crucial funding amid escalating violence.

Libyan government forces have unleashed a withering bombardment on rebels outside a key oil town, pushing them back even as the regime said Muammar Gaddafi might consider some reforms but would not step down.

The Libyan government says Muammar Gaddafi will not step down but the regime is ready to discuss changes in how the country is governed.