Libya conflict: Gaddafi forces resist Bani Walid attack
Pro-Gaddafi forces in Libya have been putting up fierce resistance in Bani Walid, one of four towns still controlled by loyalist fighters.
Anti-Gaddafi forces, who had expected to take the town earlier, have still to reach the centre.
There was fighting overnight, with exchanges of fire and rockets launched.
Latest reports say Nato has carried out air strikes on the town. A Reuters reporter heard at least five explosions and saw Nato aircraft overhead.
Earlier, anti-Gaddafi fighters pulled back from Bani Walid, saying they expected Nato air raids.
"Field commanders have told us to retreat because Nato will be bombing soon," one fighter told Reuters.
Meanwhile, the International Monetary Fund has said it recognises the anti-Gaddafi National Transitional Council (NTC) as the new government of Libya.
Anti-Gaddafi casualties were brought to the hospital outside the town after the fighting overnight, says the BBC's Richard Galpin, who is on the edge of Bani Walid.
There were more Gaddafi loyalists in the town than their opponents had expected, he says.
A convoy of new recruits was seen heading for the front line earlier on Saturday.
Anti-Gaddafi commanders said on Friday that they had no choice but to go in after coming under attack from loyalist forces.
Bani Walid and the other loyalist-held towns had been given until Saturday to surrender to the interim government.
There has also been fierce fighting near the Gaddafi-held city of Sirte.
Anti-Gaddafi forces were forced to pull back after taking heavy casualties in close-quarters fighting, one of their spokesmen was quoted as saying by the AP news agency.
The interim Libyan leadership said it had been trying to negotiate a peaceful resolution to stand-offs in Gaddafi-held Bani Walid, Jufra, Sabha and Sirte, but interim Prime Minister Mahmoud Jibril had warned NTC troops would respond if attacked.
Several convoys of former loyalists are said to have streamed over Libya's southern border with Niger over the past few weeks.
Niger has not said clearly what its position would be if fugitive leader Col Muammar Gaddafi himself sought asylum in the country.
Officials in Niger, which recently installed democracy after decades of authoritarianism, said they were letting in many sub-Saharan Africans from Libya on humanitarian grounds.
It is still not known where the former Libyan leader or his son Saif al-Islam are, our correspondent says.
The ICC has issued a warrant for crimes against humanity against Col Gaddafi, Saif al-Islam and spy chief Abdullah al-Sanussi.
Interpol on Friday issued an arrest warrant for the three.