BENGHAZI, Libya (Reuters) - The eastern city of Benghazi, the cradle of revolt against Muammar Gaddafi, was alive with celebration on Wednesday with thousands out on the streets, setting off fireworks and condemning the Libyan leader.
Jubilant rebels and supporters thronged the city center, waving red, green and black monarchy-era flags and giving out snacks and juice to passing cars, which honked their horns in a giant party. People danced, cheered and played loud music.
Anti-Gaddafi protesters hung effigies with "Mercenaries" written on them from lamp-posts, saying paid gunmen from Africa were sent by Gaddafi to try to suppress them. "Libya is Free! Libya is Free!," they chanted. "Allahu Akbar (God is Great)."
Alongside charred buildings scarred by the violence, one man held up a picture of Gaddafi's head grafted on to a pig's body as trucks full of exuberant opponents of the Libyan leader screeched around the streets of "Free Benghazi."
"Ben Ali, Hosni, Muammar," read graffiti on a city billboard setting Gaddafi's name alongside the names of the ousted leaders of Tunisia and Egypt, Zine al-Abidine Ben Ali and Hosni Mubarak.
After a week of violence in which it threw off government control, this elegant Mediterranean port of about 700,000 is starting to run itself under "people's committees" as the dust of rebellion settles. In the east of Libya, many soldiers have withdrawn from active service.
Hossam Ibrahim Sherif, director of the Benghazi city health center, told this correspondent that about 320 people had been killed in Benghazi, the city whose uprising has led the growing challenge to Gaddafi's 41 years in power.
Anti-Gaddafi festivities congregated at the court house, the security building next door had been torched in the ancient eastern stronghold that for years rivaled the Libyan capital.
Gaddafi's increasingly desperate attempts to crush the revolt have killed as many as 1,000 people and split Libya, Italy's Foreign Minister said on Wednesday.
A jail burned with its doors and windows smashed on the outskirts of Benghazi and red painted graffiti read: "No to Destruction, Yes to Freedom." Trucks piled high with goods marked as donations made their way into the center of town.
Residents displayed photos of relatives killed in 1996 at Tripoli's Abu Salim prison, where more than 1,000 inmates, many from Benghazi, were shot dead. Abdullah Hamed, 41, and engineer gestured to the photos and said: "All of them are my brothers."
Gaddafi used fighter jets to crush the rebellion against his rule in the Akhdar mountains in 1996.
A lawyer in Benghazi said a security committee formed by civilians there on Monday had arrested 36 "mercenaries" from Chad, Niger and Sudan who were hired by Gaddafi's elite Praetorian Guard to fight in the city.
People in Benghazi said earlier they now felt safe enough to start handing in weapons recovered after security forces lost control of the Libyan city.
"All the weapons the youth took are being returned to the headquarters of the Supreme Court and the neighboring Prosecutions Complex, as well as some camps, where the revolution was organized," Ali, an 18-year-old student, told Reuters by telephone.
On the road to Benghazi, bursts of gunfire echoed around the eastern Libyan town of Al-Marja and a charred building with "Down with the Tyrant" scrawled on it bore the scars of the revolt against Gaddafi that has split the country.
"This is the Revolution of the Youth," was another slogan sprayed on a wall on the approach to Benghazi, the city whose revolt posed the first challenge to Gaddafi's rule.
Bursts of gunfire in the distance appeared to be celebratory but could have been associated with robbery or retribution in an area where many people own weapons.
Britain's Sky News showed footage of anti-aircraft missiles at what it said was an abandoned base near the city of Tobruk.
On the road to Benghazi, there were long lines for fuel at an Oilibya gas station, a common sight in Libya even before the revolt in this oil producer, where people complain that despite great hydrocarbon wealth outlying areas have been neglected.
"We Have Broken The Fear Barrier, We Won't Retreat," was scrawled in Arabic script on walls of one building.
Writing by Edmund Blair and Peter Millership, editing by Giles Elgood