Shellfire from pro-Gaddafi forces lands at the northern gate of Bani Walid on Sunday Troops loyal to ousted Libyan leader Col Mummar Gaddafi have launched fresh attacks around the town of Bani Walid.
Anti-Gaddafi forces are making slow progress at Sirte Anti-Gaddafi forces are making slow progress at another loyalist stronghold - the coastal town of Sirte.
Meanwhile the National Transitional Council, Libya's interim leadership, said announcement of a new cabinet had been postponed.
The number two in the council, Mahmoud Jibril, said last-minute haggling had "indefinitely" delayed the decision, AFP news agency said.
'Big fight'
Anti-Gaddafi forces had tried to take Bani Walid, 140km (90 miles) south-east of the capital Tripoli, on Friday but were forced to retreat.
Heavy clashes have continued since then.
Reports from Bani Walid say explosions and sustained machine-gun fire were heard on Sunday morning when pro-Gaddafi forces shelled enemy positions on the outskirts of the town.
Mortars targeted a building housing anti-Gaddafi troops, along with the town's northern entrance.
One anti-Gaddafi commander, Absalim Gnuna, told Reuters news agency: "We fought all night. We have surrounded the city from all sides with the range of 40km.
"Most areas north of the central valley are clear. It is a big fight."
Mr Gnuna said he also had orders to try to help families trapped in the town to escape.
Fighters from nearby Tajoura are reported to have arrived to reinforce the anti-Gaddafi units.
At Sirte, anti-Gaddafi forces made some progress but struggled to gain a secure foothold on Saturday.
They regularly sent in gun-mounted pick-up trucks amid heavy exchanges of machine-gun and rocket fire.
The military council in nearby Misrata said 24 anti-Gaddafi fighters were killed and 54 wounded on Saturday.
NTC spokesman Ahmed Bani said its forces had taken control of the airport and a major air base, although one fighter told Agence France-Presse there were still clashes near the airport.
The fighter, Abdul Rauf al-Mansuri, said: "We don't even have 5% of Sirte because we just go in and out."
A teacher fleeing Sirte, Nouri Abu Bakr, told Associated Press conditions there were worsening, with no electricity or medicine and food supplies nearly exhausted.
"Gaddafi gave all the people weapons, but those fighting are the Gaddafi brigade of loyalists," he said.
Col Gaddafi has been in hiding since opposition forces captured the capital Tripoli in August.
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