Moamer Kadhafi loyalists mounted a fierce counter-attack in the city of Sirte on Saturday, forcing back new regime fighters under a barrage of rockets and shelling, an AFP reporter said.
Fighters of the National Transitional Council (NTC) fled helter-skelter two kilometres (just over a mile) to the captured police headquarters in the Mediterranean city, one of Kadhafi's last holdouts.
"Run, run, run!" rang out from the retreating forces.
After absorbing rocket fire and shells from NTC fighters in the morning and early afternoon, Kadhafi diehards now concentrated in two neighbourhoods -- the Dollar and Number Two -- unleashed their own barrage late afternoon.
As Grad and other rockets, shells and machinegun fire rained down on them, NTC combatants, taken by surprise, quickly fled the positions on the edge of the two neighbourhoods that they had held since Friday night.
Thick black smoke covered the two districts as rockets and shells smashed into buildings, setting some ablaze.
In a provisional casualty toll issued before the breakout, medics at a field hospital on the western outskirts of Sirte said one person was killed and around a dozen injured on Saturday.
"Kadhafi fighters are now concentrated in a small place but we can't enter all at the same time. We need a plan to defeat them," Omran Allahoyb, commander of a Misrata brigade, said before the pro-Kadhafi advance.
"We can take this place in one day but I will lose 100 men," he said, adding that the best strategy would be to bomb the area of around 1.5 square kilometres (about half a square mile) into defeat.
NTC commanders had earlier said they decided at a meeting to hold off on an all-out assault on the Dollar and Number Two districts in a bid to capture alive the top regime figures they believe are holed up there.
"The resistance from the two neighbourhoods is high because we believe there are four to five important people inside," eastern front operations chief Wesam bin Hamaibi said after the meeting.
"We are sure that (Kadhafi's son and his national security chief) Mutassim and (ousted defence minister) Abu Bakr Yunis are inside," he said.
"We also believe that Seif al-Islam (another of Kadhafi's sons) and Kadhafi (himself) are possibly inside.
"We want to capture them alive to hand them over to the judiciary rather than killing them, which is why we are still not going to have a massive attack."
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Sirte is a key goal for the NTC, which has said it will not proclaim Libya's liberation and begin preparing for the transition to an elected government until the city has fallen.
On another front, Libya's new leadership pressed a campaign to clear Tripoli of armed Kadhafi loyalists after gunbattles killed three people on Friday in the first fighting to rock the capital since its capture in August.
The head of Tripoli's supreme military council, Abdelhakim Belhaj, pledged tough action against the pro-Kadhafi fighters and "sleeper cells" of the former regime, which he said would be targeted in the clean-up operation.
Pro-Kadhafi gunmen clashed with NTC fighters in Abu Salim, a district around 10 kilometres (six miles) south of the city centre known to harbour supporters of the fugitive strongman.
"The fighters are in the process of clearing the buildings in the area of Kadhafi loyalists," said Hamad, 40, an NTC soldier manning one of the checkpoints in the neighbourhood.
Abdelrazaq al-Aradi, vice president of the security committee in Tripoli, said three people were killed in the clashes there -- two Kadhafi loyalists and one NTC fighter -- and another 30 people wounded.
Aradi told a news conference that around 50 armed Kadhafi supporters were behind the violence, 27 of whom, including four "African mercenaries," were arrested on Friday.
Abu Salim residents said the fighting broke out during pro-Kadhafi demonstrations after noon Muslim prayers, prompted by a call to rise from a pro-Kadhafi Libyan television presenter, broadcast on Iraqi TV channel Al-Rai.
The district, notorious for its prison where the Kadhafi regime held its opponents, was the last area of the capital to witness resistance after NTC forces stormed the strongman's Bab al-Aziziya headquarters on August 23.
The flare-up however came as a setback to the new regime, which hopes to proclaim the country's liberation within days, and prepare for the transition to an elected government, after Sirte is finally captured by NTC forces.
At NTC-held Ibn Sina hospital in Sirte, Barbara Frederick of the charity Doctors Without Borders (MSF) said around 500 injured people had been brought in from the city's western front since an assault was launched October 7.
Twenty-six patients remain and the others have been evacuated, said a doctor transferred from Tripoli with 20 colleagues, Abdelati Milad. The hospital itself was filled with debris but at least two operating rooms were in service.
Outside, nine unidentified corpses lay rotting in the sun under plastic sheeting, a correspondent said, revising an earlier count. At least three of them had been executed with a bullet to the head.
Around 100 civilians, mostly families of medical staff, were camped inside the facility, some two kilometres (one mile) from the front line.