Libyan interim government forces charged back into the besieged desert town of Bani Walid, a day after diehard loyalists of Moamar Gaddafi beat them back into a humiliating retreat.

Forces loyal to the new authorities were also battling Gaddafi loyalists on the streets of the ousted leader's home city, Sirte.

Opposition forces say they have taken control of the city airport but are are facing fierce resistance elsewhere.

After days of battles, they celebrated the capture of the town of Herawa, 60 kilometres east of Sirte, but have made only slow progress against heavy resistance in Sirte itself.

Nearly a month since they drove Gaddafi's forces from the capital Tripoli, interim government fighters are bogged down in sieges of Gaddafi loyalists' remaining bastions, raising doubt over whether they can quickly unite the country.

Gaddafi's spokesman, Moussa Ibrahim, said the ousted leader was still in Libya and leading resistance.

"We will be able to continue this fight and we have enough arms for months and months to come," he said.

Mr Ibrahim also accused NATO of killing 354 people in an overnight bombing of Sirte, an accusation that could not be independently verified. NATO said such accusations in the past had been false.

Mr Ibrahim said NATO air strikes on Sirte had hit a residential building and a hotel, killing the 354 people. More than 700 people were wounded and 89 were missing from that bombing, he said, giving a total death toll for 17 days of more than 2,000 killed.

"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."

The National Transitional Council (NTC) says NATO aircraft bombed a Sirte building, killing a large number of pro-Gaddafi fighters.

Meanwhile, a column of National Transitional Council (NTC) utes mounted with anti-aircraft machine guns and fresh ammunition rushed into Bani Walid as dusk fell, after Gaddafi forces shelled a checkpoint, Reuters reporters there said.

"Gaddafi forces attacked the checkpoint so our troops went in. There is a lot of fighting inside the city right now," senior regional NTC official Abdullah Kenshil said.

The day before, NTC fighters seeking to capture Bani Walid had beat an embarrassing retreat under withering fire.

Blame game

Interim government fighters are bogged down in sieges of Gaddafi loyalists' remaining bastions. ( Reuters: Goran Tomasevic )

Outside Bani Walid, NTC fighters blamed each other, their commanders and traitors for the previous day's defeat.

"When we entered the city, snipers shot at us from the front and traitors shot at us from the back," said fighter Abushusha Bellal.

"They always play tricks and shoot us in the back."

One fighter, Nuraldin Zardi, told Reuters his unit had missed the order to retreat and had found itself trapped and isolated inside Bani Walid hours after their comrades had fled.

"We will not rely on our commanders any more," he said, reflecting growing dissent in NTC ranks.

"We will do everything ourselves and take our own decisions."

The first of what NTC fighters said would be an extra 1,000 men from Tripoli and elsewhere began arriving near Bani Walid.

'We will burn you'

In Sirte, NTC forces have entered the city from the west and captured nearby Herawa to the east, but have not been able to dislodge tenacious Gaddafi fighters.

In Sirte itself, anti-Gaddafi forces who entered from the west on Friday encountered fierce resistance.

On the western highway leading to Sirte, a Reuters reporter said he could hear gunfire and shelling as NTC forces advanced into the city.

And NTC fighters danced in the streets of the town of Herawa, captured on Saturday after days of fighting.

They sang "Gaddafi, we will burn you" and ripped down posters of the fugitive former strongman, stamping on his face in the dirt.

But after a mosque where they set up a base came under heavy fire the fighters scrapped plans to press on and reinforce comrades who entered Sirte from the west.

Reuters