Aided by air-strikes, rebels have been making swift progress westwards on the coastal road Coalition air raids have hit Muammar Gaddafi's birthplace of Sirte, a key target for westward-advancing rebels.
A Libyan government spokesman said three Libyan civilians had been killed in the city's port.Unconfirmed rumours that rebels had taken Sirte sparked celebratory gunfire overnight in their stronghold Benghazi.
They came as Nato took full command of the whole military operation in Libya, intended to enforce a UN resolution to protect civilians.
Foreign correspondents in Sirte said they heard several loud explosions in the city as aircraft flew overhead.
A rebel spokesman in Benghazi said Sirte was now in the hands of rebel forces - but there has been no independent confirmation of the claim, and international journalists inside the city suggested it was still in government hands on Monday morning.
Libyan government spokesman Moussa Ibrahim said three young Libyan men had been killed in an air strike on a nearby fishing harbour, but that there was "nothing military or quasi-military" there.
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As Gaddafi's hometown, Sirte has a great deal of support for the leader. We're told there have been signs of discontent and perhaps a split among Gaddafi's people there, but nevertheless its importance is that it's the only major place in the centre of the country still held by Gaddafi forces.
They've lost the whole of the east and if they lose Sirte they would have lost the middle of the country as well. The rebels would feel their progress towards Tripoli was unstoppable.
Although seemingly premature, I suspect the reports of rebels taking the city are having a psychological impact on Gaddafi supporters in Tripoli.
Three weeks ago it was obvious that the morale of the Gaddafi forces wasn't terribly high and now, combined with the attacks of the coalition forces, it must be worse.
The quicker the rebel progress goes, the faster morale here will start to buckle. But if progress slows I suspect the reverse may happen, and resistance will stiffen.
Advance on Tripoli Analysis
They've lost the whole of the east and if they lose Sirte they would have lost the middle of the country as well. The rebels would feel their progress towards Tripoli was unstoppable.
Although seemingly premature, I suspect the reports of rebels taking the city are having a psychological impact on Gaddafi supporters in Tripoli.
Three weeks ago it was obvious that the morale of the Gaddafi forces wasn't terribly high and now, combined with the attacks of the coalition forces, it must be worse.
The quicker the rebel progress goes, the faster morale here will start to buckle. But if progress slows I suspect the reverse may happen, and resistance will stiffen.
Heavy explosions were also heard in the capital, Tripoli, late on Sunday. Libyan officials say more than a week of strikes have killed nearly 100 civilians but this cannot be independently confirmed.
The air strikes, intended to prevent Col Gaddafi's forces from attacking civilian targets among the uprising against his rule, have allowed rebel forces to push westwards at a rapid speed along the coastal highway from their eastern stronghold of Benghazi.In the last two days a number of coastal communities and important oil installations, including Ras Lanuf, Brega, Uqayla and Bin Jawad, have fallen to the rebels since they took control of Ajdabiya.
Sirte lies about halfway along the coast between Tripoli and and Benghazi.
Journalists in the city on Sunday said it was swarming with soldiers.
"We want to go to Sirte today," rebel fighter Marjai Agouri told Reuters news agency.
"I don't know if it will happen," he said outside Bin Jawad with about 100 other rebels armed with rocket launchers, anti-aircraft guns and pickup trucks mounted with machine guns.
'Terrorist gangs' On Sunday, Nato's Secretary General, Anders Fogh Rasmussen, said the bloc was taking charge of the whole military operation in Libya "with immediate effect".
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In facts: Sirte
- Birthplace of Libyan leader Muammar Gaddafi
- Port city 450km (280 miles) east of Libya's capital Tripoli
- Halfway along Libya's northern coast between Tripoli and rebel stronghold of Benghazi
- Home to some ministerial offices as Col Gaddafi tried to transfer more authority
- Population of around 140,000
Mr Rasmussen said Nato's goal was to "protect civilians and civilian-populated areas under threat of attack from the Gaddafi regime".
"Nato will implement all aspects of the UN Resolution. Nothing more, nothing less," he added."We are already enforcing the arms embargo and the no-fly zone, and with today's decision we are going beyond.
"We will be acting in close co-ordination with our international and regional partners to protect the people of Libya."
The BBC's Chris Morris in Brussels says the mission to protect civilians was more sensitive because it involved debate about what exactly were legitimate military targets on the ground.
Russian Foreign Minister Sergei Lavrov said on Monday that attacks on pro-Gaddafi forces amounted to intervention in a civil war, and were not backed by the UN Security Council resolution, Reuters reported.
There were also internal disagreements - notably between France and Turkey - about political control of the mission, but they have now been resolved, our correspondent says.
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The BBC's Matthew Price says there have been disputes within Nato about the role it should take in Libya
Alongside the Nato command structure will be a separate, high-level committee of representatives of all countries taking part in the military action, including Arab states. It will give what one official called "broad political guidance."
Meanwhile, the battle for Misrata, the last significant rebel-held city in western Libya, has continued.
On Sunday evening, a resident told the BBC that eight people had been killed and 26 wounded - five of them critically - as Col Gaddafi's forces advanced on the al-Jazeera residential area in the west of the city.
Meanwhile, four people have been arrested after a woman claimed she was raped and tortured by Gaddafi supporters, Libyan officials said.
Iman al Obeidi said she was raped and tortured by men connected to the regime who detained her for two days.
She was bustled away by government minders while trying to talk to foreign journalists at Tripoli's Rixos Hotel in Tripoli on Saturday.
http://www.bbc.co.uk/news/world-africa-12877319