Nato airstrikes pounded an area in Muammar Gaddafi's hometown today, fighters said, while revolutionary forces surrounding the city came under rocket fire.
Despite the continued fighting, Libya's new rulers said a new government would be formed within 10 days, as they struggle to assert control over the country and assert international legitimacy.
Mahmoud Jibril, the premier for the National Transitional Council (NTC), said most of the work has been done on forming a new Cabinet, but it was important to ensure national consensus on the issue.
The NTC failed to agree on a list of ministers over the weekend, dashing hopes a new government would be in place before Jibril and NTC leader Mustafa Abdul-Jalil left to represent Libya at the UN General Assembly.
Mr Jibril said yesterday in New York that he expects a new government to be formed "within a week, 10 days maximum from now," adding that the current political difficulties were not unusual for a "country which was absent from ... .any democratic culture."
He said "most of the work has been done" but one issue still to be decided was the number of ministries to be located in the capital. He said one option was to divide the ministries between the eastern and western parts of the country.
Gaddafi wielded near-total control over the North African nation for nearly 42 years before he was forced into hiding after months of civil war.
The uprising - inspired by the successful ouster of autocratic leaders in Tunisia and Egypt - spread from the eastern city of Benghazi in mid-February.
Armed fighters still loyal to the fugitive leader have repelled anti-Gaddafi forces in Sirte, the mountain enclave of Bani Walid and the southern area of Sabha.
Government forces have made inroads against Gaddafi loyalists in Sabha, the gateway to a key road leading south to the border with Niger.
Abdel-Salam Sikayer, a spokesman for a local council in Sabha, said anti-Gaddafi forces largely have control over two neighbourhoods and are fighting to overtake pockets of resistance.
He said 28 people, including three children, had been killed in fighting over the past two days - 18 on Tuesday and 10 on Monday.
US president Barack Obama said the Nato-led bombing campaign in Libya will continue as long as civilians are threatened. He urged Gaddafi loyalists to lay down their arms and join the new Libya, declaring, "the old regime is over."
Nato has launched over 8,750 strike sorties on Libya since late March.
The latest strikes hit military targets belonging to Gaddafi loyalists in Sirte. The Western military alliance also said it struck targets yesterday some 175 miles south of Sirte in Weddan, where revolutionaries suspect military weapons to Gaddafi loyalists in Sirte may be coming from.
Revolutionary fighters tried to push into Sirte, 250 miles south-east of Tripoli on the Mediterranean coast, over the weekend but were driven back by fierce rocket and gunfire. They pulled back to regroup, although the two sides exchange fire daily.