Libyan rebels fought for control of a major supply road to the capital on Saturday, after seizing a border crossing with Tunisia as they hunted for Muammar Gaddafi. With the search for the dictator and his sons continuing, the Egyptian news agency Mena, quoting unidentified rebel fighters, reported from Tripoli that six armoured Mercedes sedans had crossed the border at the south-western Libyan town of Ghadames into Algeria.

The report said that the cars could be carrying top figures from the Gaddafi regime. Rebels were unable to pursue the vehicles because they did not have ammunition or the necessary equipment, Mena said. The report could not be independently confirmed.

Clearing the supply road of remaining Gaddafi loyalists from the Tunisian border to Tripoli would help to ease growing shortages of fuel and food, particularly in the battle-scarred capital, where problems are now acute.

Rebel officials in Tripoli are struggling to maintain electricity and water supplies, with fears that much of the Libyan capital could be without water by Monday 29 August. The Transitional National Council (TNC) announced on Saturday that a new Tripoli local council would be operating from the previous municipal building and launching a website with updates on basic services.

Usama el-Abed, deputy chairman of the Tripoli council, said: "Definitely we recognise there are a lot of challenges. The basic services are the ones we are concentrating on now – the health sector with regard to hospitals, staff, medication."

In the city, neighbourhoods have been without running water for several days and the electricity station is no longer coping with demand. Rebel officials who are gradually taking over the running of the capital say there has been no damage to water or power supply lines and are instead blaming the deterioration on "technical issues". But it was reported last night that the TNC believe Tripoli's water supply had been poisoned by Gaddafi. BBC journalist Gavin Lee tweeted that the TNC had claimed Gadaffi forces had tried to poison the water and many people had fallen ill, but was undertaking tests because it could not confirm what type of poison had been used.

Mahmoud Shammam, information minister in the TNC, said it already controlled most of the supply road, but that regime loyalists are shelling it in the area of Zwara, west of Tripoli. "We hope to be able to control the road today," he told reporters.

Leaders of the council know that they will be judged by whether they can match the benchmark set by the ousted autocrat and are stressing that essential supplies, including drinking water and petrol, are on the way.

"We don't know the electricity problem, we don't know the water problem, we don't know the communication problem," Shammam said. "In the next few days we will have answers."

Dozens of decomposing bodies still lie in and around the main hospital in the Abu Salim district, abandoned by medical staff during the fighting, according to Reuters. El-Abed insisted: "We have a team working on that today. Some of these issues will be in relation with the Red Cross." Pressed on whether the city was now under full rebel control, he replied: "The Gaddafi regime forces have definitely come to their end, but there will always be remnants, there will always be residues, there will always be people who, for the sake of vendettas and vengeance and stealing the joy of celebration, will come up with some action that may not be expected."

Shammam added that a stabilisation task force had been set up to work with other teams in restoring essential services. "We have 30,000 metric tonnes of gasoline and will start distributing to the public today. Diesel fuel will arrive the day after tomorrow, which is essential to the city to support the power and water supply."

With all the city's petrol filling stations remaining closed, drivers are paying black-market rates of around $80 (£50) for 20 litres of petrol. The two mobile telephone networks are also working intermittently.

More pressing for residents, however, is the stench from piles of refuse on roads. Tripoli's council has not yet sent out trucks to collect rubbish. However, one lone truck – driven by a council worker who had not been asked to do so – was collecting rubbish from the Tajura area on Friday. "These are my people and I will look after them," he said. "If all the people work together, none of us will have problems."

TNC officials said they did not yet know how many people were affected by power and water shortages on Sunday. One source said: "It's not a crisis yet, but it might become one. It's certainly a concern."

• This article was amended on 1 September 2011. The original omitted the date when water supplies in Tripoli were feared to run out. This has been corrected.