Families in pickup trucks stacked with mattresses and jugs of water fled Muammar Gaddafi's hometown of Sirte ahead of an expected new push by revolutionary forces to seize the city, as the anti-Gaddafi forces claimed progress in the battle for a city in the remote southern desert.
A commander of the new government's forces said they were in control of most of the Gaddafi desert stronghold of Sabha after a day of fighting.
The commander, Bashir Ahwaz, said most of the tribesmen loyal to Gaddafi fled the city instead of putting up a fight, but three of his men and 19 pro-Gaddafi tribesmen were killed.
He said it would take another week for his forces to take control of all of Libya's southern desert and its borders with Algeria and Niger.
Several groups of officials from Gaddafi's regime, as well as one of the ousted dictator's sons, have fled to Niger.
Earlier, residents fleeing Sirte said they had been living under a state of siege with Gaddafi's forces preventing them from leaving, while living conditions deteriorated and the city came under constant rocket fire and Nato bombardment.
"I tried to leave earlier with my family, but Gaddafi's forces wouldn't let me," said Abdullah Mohammed, a 34-year-old computer engineer travelling with his wife, two daughters and son. "We managed to run away at dawn by taking back roads out of the city."
Youssef Ramadan, 35, said there has been no power since August 20, a day before revolutionary forces swept into the capital Tripoli and forced Gaddafi into hiding.
"There's no fuel and food is running low," he said. "A lot of civilians are stuck in their houses because of the fighting."
Mr Ramadan, who was taking his wife, two-year-old daughter, seven-year-old son, brother and mother out of the city of about 100,000 people, said regime forces were using houses, schools and hospitals to store ammunition.
Tripoli fell to Gaddafi opponents in late August after a six-month civil war with Nato airstrikes aiding the rebels - marking the collapse of Gaddafi's nearly 42-year rule.
Gaddafi ridiculed the claims from his hiding place.
"What is happening in Libya is a charade gaining its legitimacy through airstrikes that will not last forever," he said in the statement broadcast on the Syrian-based Al-Rai TV, which has become his mouthpiece.
"It's hard to bring down this regime because it represents millions of Libyans."
The transitional Libyan government has insisted it will press forward with efforts to rebuild the government despite the continued fighting. But Gaddafi's continued defiance has raised fears the country could face a protracted insurgency such as those in Iraq and Afghanistan.
President Barack Obama warned dark days lie ahead for the Libyan people as they try to reshape their country, promising the world will stand with them and announcing that the US ambassador was heading back to Tripoli to lead a reopened American embassy there.
"After decades of iron rule by one man, it will take time to build the institutions needed for a democratic Libya. I'm sure there will be days of frustration," the president said at a high level United Nations meeting.