| BANI WALID, Libya
BANI WALID, Libya The war is not yet over for Libya's new rulers in the desert town of Bani Walid where Gaddafi loyalists vow to fight on for their fallen leader and other residents are angry over violence and looting.
Enraged by what they see as acts of retribution by forces loyal to Libya's new government, tribesmen say their men are already trying to regroup into a new insurgency movement in and around the strategic desert town south of the capital, Tripoli.
"The Warfalla tribe is boiling inside. They can't wait to do something about this," Abu Abdurakhman, a local resident, said during a tour of his house destroyed by what he said was a revenge attack by anti-Gaddafi forces.
"The Warfalla men of Tripoli and elsewhere are sending around text messages saying: 'We need to gather and do something about this. Let's gather! Let's gather!'"
Gaddafi loyalists have no hope of reinstalling the former strongman's clan following the dictator's death, with his son, Saif Al-Islam, on the run, and a wave of anti-Gaddafi sentiment sweeping Libya and internationally.
But Libya's interim government, the National Transitional Council (NTC), is aware that support from disenchanted, armed civilians could bolster a tiny but lingering Gaddafi force in the desert and some towns.
And to nip any further insurgency in the bud, it now needs to win people's hearts and minds -- a formidable task in a war-shattered town like Bani Walid.
Bani Walid is of particular importance because it is the spiritual homebase to Libya's biggest tribe, the powerful Warfalla, which includes up to one million of Libya's 6 million population, with tribesmen scattered across the country.
The town is awash with guns and some neighborhoods still flaunt pro-Gaddafi graffiti. Shootouts between government forces and Gaddafi loyalists occur daily on the edge of Bani Walid.
Government forces present in the city said they were aware of the problem but believed that with Gaddafi now dead, hostilities would soon fizzle out in the absence of a clear goal and before developing into a formidable insurgent force.
"Yes, we know there are armed civilian loyalists," said Omar al Mukhtar, commander of anti-Gaddafi forces in northern Bani Walid. "But I don't think they pose any threat because they only have light weapons. "
In private interviews, fighters were visibly more alarmed.
"We always stamp on Gaddafi portraits spread out on the ground but they step over them. There are shootouts every day with Gaddafi loyalists," said one soldier from a Bani Walid brigade.
Fighters said loyalists were using dried-up riverbeds to launch night-time attacks on their positions -- a tactic that highlights the loyalists' resolve to fight on.
Tucked away in desert hills 150 km (90 miles) south of Tripoli, Bani Walid fell to NTC forces on October 17 -- three days before Gaddafi's death marked the end of the eight-month war.
NTC forces rolled into the city in Soviet tanks seized from Gaddafi forces earlier in the war and set up military bases in central Bani Walid -- still very much a ghost town after thousands fled following weeks of fierce fighting.
Troops patrol deserted streets and revolutionary flags flutter above gutted buildings. Some families are slowly coming back, only to discover that many family homes had been ruined. There is still no water and electricity.
A step deeper into its neighborhoods, their mud and brick homes cascading steeply into barren valleys, offers a glimpse into an unfriendly world still living in a state of war.
In one neighborhood, Tlumat, gunshots rung out and locals gathered quickly during a Reuters visit on Tuesday, some looking alarmed and hiding their faces with black scarves.
Gaddafi may be dead and buried, but freshly sprayed graffiti offered a sinister reminder that for some people in Libya, his memory still lives on.
In Tlumat, crumbling walls were covered with fresh slogans sprayed in the green color of Gaddafi's own revolution in 1969. One, peppered with bullet holes, echoed the ubiquitous slogan of the old rule: "Allah, Muammar, Libya, nothing else."
Residents said NTC units appeared regularly in their neighborhood -- perceived as pro-Gaddafi -- shooting randomly in the air at night to terrorize the people in the past week.
Locals also accused brigades from far-flung places such as Zawiya and Garyan of attacking their homes because of their belief that Bani Walid tribesmen once fought on Gaddafi's side during the siege of those towns earlier in the war.
"This is not a revolution. These are acts of revenge. What I have seen is not a revolution," said Abdulkhakim Maad, 30.
"These so-called rebels are stealing everything, looting houses, cars, people's belongings. They storm into neighborhoods and shoot everywhere to scare the people."
Swearing angrily, another man who was selling cigarettes on a street corner littered with rubble and bullet casings, said: "The rebels destroyed our houses. There is a lot of looting. We were already poor. All of this made our lives even worse."
Some locals said they were ready to give the NTC a chance to contain local brigades and enforce law and order.
"But if the NTC does nothing then we will consider them as an enemy," said Tabet Awena, 80, a tribal elder in Bani Walid, pointing at a house with a smashed-up facade destroyed in what he said was a recent raid by an NTC unit.
"The reaction here will be very strong. We will fight to the death."
Commanders denied allegations of looting and retribution.
"Yes, houses were ruined, cars, personal belongings and gold stolen. Homes were destroyed by gangs from Zawiya. They are not real rebels," said Abdusalam Saad Mheda, a field commander.
"Rebels are not involved in any looting. They are good people. They are loyal to their country."
HEARTS AND MINDS
Abu Abdurakhman, whose house was damaged in what he said was a raid by an NTC unit three days ago, said that people were so angry that even those who initially welcomed rebel forces during the siege of Bani Walid have now turned against them.
"Muammar Gaddafi may be over but these people see what the so-called rebels are doing and they are angry," he said.
"Most of the looting happened when people were away. When they came back even those who supported the revolution ... had turned against it."
With the staunchest loyalists hiding in the desert, any reconciliation effort will be hard. Many families are divided, and people spoke of growing bitterness even within their tribe.
"My cousins are Gaddafi loyalists, so they are staying in the desert," said Mustafa Hassan, 32, as he drove back into Bani Walid with his family from their war-time exile in Tripoli. "It's happening in every family. It's all divided now."
The NTC is aware that in a place like Bani Walid, its top priority is to win people's hearts and minds -- and to do so quickly, before it's too late to stop an insurgency.
"These are simple people. They were imprisoned by Gaddafi militiamen for months and now they don't know what is happening in other parts of Libya," said Mheda, the commander.
"Many families are coming back but their houses are destroyed. There is no electricity. We are working on that. Every day will be better."
(Writing By Maria Golovnina, Editing by Belinda Goldsmith)