Rebel in the stronghold of Benghazi today fired AK-47s in jubilation and danced on burnt-out tanks that appeared to have been destroyed by allied airstrikes.

The celebrations marked a dramatic swing from the fear that gripped the city of nearly 700,000 a day earlier, when Libyan dictator Muammar Gaddafi's forces pounded the city with artillery and tank shells and punched through the outskirts of Benghazi in fierce street fighting.

After weeks of ceding territory to government troops, the rebels' successful defence, coupled with French and US airstrikes on Gaddafi's forces overnight, gave the city - and its defenders - a newfound swagger.

Mohammed Faraj, a 44-year-old rebel fighter manning a checkpoint, said the rebels were now ready for anything from Gaddafi.

"Our spirits are very high," said Faraj, a grenade in each hand. "Me and all of Benghazi, we will die before Gadhafi sets foot here again."

Some 12 miles south down the road, the charred remains of seven government tanks, many with their turrets blown off, lay in a dusty field along with two armoured personnel carriers, apparently hit by an allied airstrike overnight.

Hundreds of men roamed the site, climbing atop the tanks and snapping photographs with their phones.

"Thank you France, thank you America," said Abdul Gader Dejuli as he surveyed the wreckage.

Along the tree-lined road into Benghazi, buildings riddled with pockmarks and burnt-out cars, buses and tanks gave testimony to the ferocity of the fighting that hit the city a day earlier.

"Yesterday was a catastrophe," said Salwa el-Daghili, a member of the opposition national council that governs rebel-held territory. "Today, there is hope - you can see it on the streets."

Some of the roadblocks that had been hastily thrown across Benghazi's roads yesterday had been pushed aside today to make way for the traffic that moved smoothly through the streets. While anti-aircraft guns remained on almost every corner, the young men who had taken up positions on the streets with homemade firebombs yesterday were gone.

"We are grateful to the US and France for what they have done," a store keeper said.

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