| BANI WALID/SIRTE, Libya
BANI WALID/SIRTE, Libya Libyan interim government forces charged a desert stronghold controlled by fighters loyal to Muammar Gaddafi and battled on the streets of the ousted leader's hometown as they struggled to quash his last pockets of support.
Nearly a month since they drove Gaddafi's forces out of the capital Tripoli, transitional government fighters have become mired in sieges of his loyalists' remaining redoubts, raising doubt over whether they can quickly unite the vast country.
Forces backed by Libya's National Transitional Council (NTC) made little headway against stiff resistance in Gaddafi's birthplace Sirte on Saturday, but were able to celebrate the capture of the town of Herawa 40 miles to the east.
The fighters also stormed back into the desert town of Bani Walid, a day after diehard loyalists beat them into a retreat.
An NTC spokesman said anti-Gaddafi forces also captured the small town of Birak as they advanced on the major loyalist stronghold of Sabha, deep in the remote southern desert.
Gaddafi's spokesman said the ousted leader was still in Libya and leading resistance. Moussa Ibrahim also accused NATO of killing 354 people in a bombing of Sirte, an accusation Reuters could not independently verify.
NATO said such reports in the past had been false.
A column of NTC pickup trucks mounted with anti-aircraft machine guns and fresh ammunition rushed into Bani Walid as dusk fell across Libya's interior desert.
"Gaddafi forces attacked the checkpoint so our troops went in. There is a lot of fighting inside the city right now," senior regional NTC official Abdullah Kenshil said.
Ibrahim, the deposed leader's spokesman, contacted Reuters by satellite telephone to say Gaddafi was still in Libya, leading the "resistance" against his foes.
"We will be able to continue this fight and we have enough arms for months and months to come," he said.
He said NATO air strikes on Sirte had hit a residential building and a hotel, killing 354 people. More than 700 people were wounded and 89 were missing from that bombing, he said, giving a total death toll for 17 days of more than 2,000.
There was no way to verify the account, as pro-Gaddafi-held parts of the city were inaccessible. NATO has repeatedly denied in the past that its bombings -- authorized by the United Nations to protect civilians -- have killed many civilians.
"LIBERATION" ON HOLD
With fighting still raging in the seven-month war, Libya's interim council is unable to declare all of the oil-producing North African nation "liberated" and begin a timetable for drawing up a democratic constitution and holding elections.
Outside Bani Walid, NTC fighters blamed each other, their commanders and traitors for the previous day's defeat.
"When we entered the city, snipers shot at us from the front and traitors shot at us from the back," said fighter Abushusha Bellal. "They always play tricks and shoot us in the back."
The first of what NTC fighters said would be an extra 1,000 men from Tripoli and elsewhere began arriving near Bani Walid.
But Gaddafi forces are also getting reinforcements from Sirte and are throwing much of their fire power into Bani Walid to protect one of Gaddafi's sons and another "big fish" hiding there, the NTC's Kenshil said.
"We already know that Saif al-Islam is there. But we believe someone even more important is there," he told reporters. Asked whether this was Muammar Gaddafi, Kenshil indicated this was the case. Both men are wanted by the International Criminal Court for crimes against humanity.
In Sirte, anti-Gaddafi fighters battled street by street for the third day running, dodging sniper, assault rifle and rocket fire from loyalists perched on the city's rooftops.
Orange flashes of gunfire mixed with dust and black smoke over the sand-colored buildings of the seaside city, as scores of machinegun- and rocket launcher-mounted trucks snaked through its streets.
Pro-NTC soldiers said they had been battling for Sirte on three fronts -- from the west, the south and the east entrances -- but had been advancing slowly.
"There's been fighting by the sea and in the city," said one fighter who did not give his name. "We are gathering and then advancing. We are retaking it step by step."
East of Sirte, pro-NTC fighters danced in the streets of the town of Herawa, captured on Saturday after days of fighting. They sang, "Gaddafi, we will burn you," and ripped down posters of the former strongman, stamping on his face in the dirt.
But after a mosque where they set up a base came under heavy fire, the fighters scrapped plans to press on and reinforce comrades who entered Sirte from the west.
"Answer me! Answer me!" one pro-NTC fighter sobbed as he cradled the body of his friend, killed by shrapnel wounds to his head.
(Additional reporting by William MacLean and Joseph Logan in Tripoli, Sherine El Madany in Herawa, Emma Farge in Benghazi, Barry Malone and Sylvia Westall in Tunis, Bate Felix in Niamey and Juliane von Reppert-Bismarck in Brussels; Editing by Mark Heinrich)