Families fled Libya’s coastal city of Sirte in their dozens yesterday after two days of clashes between Islamic State militants and fighters loyal to a government based in Tripoli, with the violence set to escalate, according to witnesses.

Families were seen packing into cars and heading westwards along the coast for Misurata, the stronghold of Libya Dawn, the armed group that backs the government in the capital, Tripoli. Some 20 cars evacuated staff from a hospital.

One resident leaving the city said Islamic State had told them that more fighting was likely in the next few days. Fuel was running short in Sirte while some shops had closed, he said.

The region east of Sirte, towards Ben-ghazi, has been a battlefield since December when Libya Dawn tried to seize Libya’s biggest oil ports, Es Sider and Ras Lanuf, which are held by forces loyal to the internationally recognised government of Prime Minister Abdullah al-Thinni in the east.

Reinforcements from Misurata could be seen arriving yesterday on the outskirts of Sirte – the birthplace of Muammar Gaddafi, who was ousted four years ago after decades in power.

Islamic State has exploited turmoil in Libya, a major oil producer, where Thinni’s government and the administration in Tripoli and their respective allies are fighting for power. Militants loyal to Islamic State have taken over government buildings, a hospital and the university in Sirte and at the weekend fought near the city with Libya Dawn forces, although there was no major confrontation in the city centre, residents said.On Sunday, a car bomb exploded in Misurata at the headquarters of a force sent to fight Islamic State in Sirte. Misurata has largely been spared the kind of violence gripping other parts of Libya. There was no claim of responsibility.

Militants loyal to Islamic State have claimed responsibility for an attack on the luxury Corinthia hotel in Tripoli in January, as well as the killing of a group of Egyptian Copts from Sirte that triggered air strikes by Egypt.

Meanwhile Spain yesterday said the EU should consider an oil embargo and freezing of Libyan central bank assets if UN-brokered talks to resolve the country’s political crisis failed.

EU foreign ministers agreed to draw up proposals for an EU mission to Libya if the talks produced a deal between two rival governments and armed factions battling for power and oil wealth.

Spanish Foreign Minister Jose Manuel Garcia-Margallo told reporters the formation of a united government was the “last hope for a peaceful solution”. Should the talks fail, the EU should take measures to force the parties back to the table.

“I think we should consider measures to freeze the assets of the central bank ... and possibly impose an oil embargo, to convince all parties that only with political stability, there can be economic growth,” Jose Manuel Garcia-Margallo said.

Ministers backed a call by EU foreign policy chief Federica Mogherini to examine sending a mission to Libya, without giving any details at this stage. Italy’s foreign minister said sending European police officers “would be of huge importance”.

Mogherini has floated the idea of the 28-nation EU sending a team to Libya to monitor a ceasefire or to protect airports and other infrastructure if the talks succeed. She has also suggested EU ships could help police an arms embargo.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.