Libya NTC forces in Bani Walid

NTC military commanders said they met heavy resistance from Gaddafi loyalists in the town, some 170km southeast of Tripoli.

Meanwhile, fighting is continuing for Col Gaddafi's hometown of Sirte.

In Tripoli, bulldozers have begun to demolish Col Gaddafi's fortress-like Bab al-Aziziya compound.

Interim leaders said it was time "to tear down the symbol of tyranny".

National Transitional Council (NTC) commanders say troops have launched a fresh assault on the desert town of Bani Walid, but the extent of their advance into the desert town remains unclear.

Fighters approached the town on Sunday from the north and south after launching a barrage of artillery fire against the positions of pro-Gaddafi fighters, according to the Agence France-Presse news agency.

Some reports said the NTC forces reached the city centre, but these have not been verified.

While NTC forces surround Bani Walid, they have so far been unable to make a successful advance into the town due to resistance from some 1,500 Gaddafi loyalists believed to be there.

Last week, troops were pulled back after suffering heavy losses.

Along with Sirte, Bani Walid is one of only two remaining towns in Libya resisting the rule of the NTC.

In Sirte, commanders have been reorganising their forces in an attempt to prevent friendly fire, which some say is slowing their advance.

A BBC correspondent in Sirte said on Sunday there had been an attempt to co-ordinate the assault with fighters from Misrata in the west told to hold their positions, while troops from Benghazi in the east tried to take ground in the city centre.

However, the situation is chaotic and violent, he adds.

As the fighting continues, the NTC is struggling to exert its authority over the country.

There have been reports of widespread looting by fighters around Sirte, with witnesses saying truckloads of stolen goods are being driven away.

Meanwhile, NTC forces have bulldozed the green walls surrounding Muammar Gaddafi's main Tripoli compound.