With prospects of a negotiated settlement fading, both sides appear to be preparing for the five-month-old war to grind on into the Muslim holy month of Ramadan in August.
“We have started attacking Ghezaia with rockets and tanks,” rebel spokesman Mohammed Maylud said.
Ghezaia is a town near the Tunisian border which has been in government hands since the conflict began.
At a checkpoint outside the nearby rebel-held town of Nalut, they sounded optimistic as the fighting began.
“We are confident we can beat Gaddafi now, we have captured more weapons from the Libyan army, mostly AK-47s,” said Mohammed Ahmed, 20, a market trader turned fighter.
Basim Ahmed, a fighter coming back from the front, said rebels had taken control of parts of three villages and many government troops had fled, but this was not possible to verify.
As sustained bombardments could be heard in the distance, an ambulance raced to Nalut hospital. A rebel with a gunshot wound to the shoulder was brought into the emergency room, where he lay semi-conscious.
Minutes later a commotion could be heard in the parking lot. A government soldier who had been captured was led to a hospital bed a few feet away from the rebel. He was missing a hand and was barefoot.
The soldier, who gave his name as Hassan, told Reuters that the army was losing the will to fight.
“We don’t want to keep fighting. Everybody is against us.” he said, speaking from his hospital cot.
Blood seeped through the bandage bound around the stump of his missing hand but a rebel nonetheless tried to interrogate him, asking him his unit and where he was from.
Eight wounded combatants lay in the hospital in total — four rebels and four Gaddafi soldiers. Six other Gaddafi soldiers had been taken prisoner, witnesses said.
Rebels have taken large swathes of Libya since rising up to end Gaddafi’s 41-year rule.
They hold much of the Western Mountains range, northeast Libya including their stronghold Benghazi, and the western city of Misrata.
Yet they remain poorly armed and are often disorganized. Despite the backing of NATO air strikes, they have failed to reach the capital Tripoli and appear unlikely to do so soon.
Ghezaia is of local strategic importance, a base from which government troops attack rebels in the mountains, but if it fell this would not bring the opposition nearer to Tripoli.
Gaddafi has scoffed at the rebels’ efforts to end his rule and has weathered a rebel advance and NATO air raids on his forces and military infrastructure.
A recent flurry of diplomatic activity has yielded little, with the rebels insisting Gaddafi step down as a first step and his government saying his role is non-negotiable.
United Nations envoy Abdel Elah al-Khatib visited both sides this week with plans for a ceasefire and a power-sharing government that excludes Gaddafi, but won no visible result.
Asked about Khatib’s proposal, rebel leader Mustafa Abdel Jalil said: “We were surprised the day before yesterday that we are taking 10 steps back… and he says to share power with Muammar Gaddafi’s regime. This is laughable.”
Gaddafi also appeared defiant on Wednesday, urging rebels to lay down their arms or suffer an ugly death.
“We all lead this battle, until victory, until martyrdom,” he said in a message aired at a pro-Gaddafi rally in Zaltan, 140 km (90 miles) west of the capital Tripoli.
RECOGNISING THE REBELS
Ramping up pressure on Gaddafi, Britain expelled his diplomats from London on Wednesday and invited the rebel National Transitional Council to replace them.
Foreign Secretary William Hague announced that Britain now recognized the rebels as Libya’s legitimate government and unblocked 91 million pounds ($149 million) in frozen assets.
The United States and about 30 other nations have also recognized the opposition, potentially freeing up billions of dollars in frozen funds.
Gaddafi’s government said the British move was “illegal and irresponsible” and a “stain on the forehead of Britain.”
“We will go to the International Court of Justice and the national courts in Britain, and we will use their justice,” said Libya’s deputy foreign minister, Khaled Kaim.
(Additional reporting by Joseph Nasr in Berlin, Rania El Gamal in Benghazi, Hamid Oul Ahmed in Algiers, Missy Ryan and Lutfi Abu Aun in Tripoli, Mussab Al Khairallah in Misrata; Writing by Lin Noueihed and Richard Meares; Editing by Angus MacSwan)
($1 = 0.612 British Pounds)