Rebel fighters captured Muammar Gaddafi's heavily defended Bab al-Aziziya compound and headquarters in Tripoli this evening after a day of heavy fighting, an AFP correspondent witnessed.

The defenders had fled, and there was no immediate word on the whereabouts of Gaddafi or his family after the insurgents breached the defences as part of a massive assault that began in the morning.

"Rebels breached the surrounding cement walls and entered inside. They have taken Bab al-Azizya. Completely. It is finished," the correspondent said.

"It is an incredible sight."

Only minutes earlier, rebel spokesman Colonel Ahmed Omar Bani said from Benghazi: "Our forces are surrounding Bab al-Azizya. There is a fierce battle going on there. We are now controlling one of the gates, the western entrance."

In the hours that led up to the storming of the compound in central Tripoli, the sound of the fighting was the most intense heard in the city since rebels arrived three days ago.

The sky was filled with the sound of heavy and light machine guns as well as mortars, with the overhead roar of NATO jets that had been carrying intensive overflights though it was unclear if there were any air strikes.

Even two kilometres (about a mile) from the fighting, the almost constant whistle of falling bullets could be hear from the rooftops, as the city's mosques chanted "Allahu Akbar" (God is greatest).

Exultant rebel fighters packed in trucks and cars have since Sunday streamed across the capital of the oil-rich North African state, seizing control of Gaddafi's state television network and Tripoli's seaside Green Square.

But the euphoria of their lightning entry into the heart of the capital, which sparked celebrations and predictions that Gaddafi's days are numbered, has given way to caution that the fighting is far from over.

The opposition's image took a knock when its claims that Gaddafi 's son Seif al-Islam had been arrested were refuted by none other than the man himself, who appeared before cheering armed loyalists outside Bab al-Azizya in the early hours of this morning.

"Tripoli is under our control. Everyone should rest assured. All is well in Tripoli," Seif told journalists at the compound, smiling broadly and flashing the V for victory sign.

"I am here to refute the lies," the 39-year-old said about reports of his arrest, and accused the West of waging a "technological and media war to cause chaos and terror in Libya."

Seif, who like his father is wanted by the International Criminal Court (ICC) for crimes against humanity, claimed the insurgents had suffered "heavy casualties" yesterday when they launched their first attempt to storm the Bab al-Azizya compound.

British Deputy Prime Minister Nick Clegg insisted in London that the defiant appearance of Seif was "not the sign of some great comeback for the gaddafi regime".

"He is not roaming freely through Tripoli. He and the remaining pro-Gaddafi forces are now cornered, they are making their last stand, and it's only a matter of time before they are finally defeated," Clegg said.

The opposition also suffered another setback when Mohammed Gaddafi , the leader's eldest son, escaped from house arrest, according to the Libyan ambassador to Washington in an interview with CNN.

Outside of the capital, the rebels said they had cut off a column of pro-Gaddafi troops attempting to march on Tripoli from the city of Sirte, the leader's hometown.

According to a NATO officials in Brussels, loyalist forces fired a Scud missile in the direction of the rebel-held western city of Misrata during yesterday's fighting.

The "surface-to-surface Scud" was launched "from the vicinity of Sirte," chief NATO spokeswoman Oana Lungescu said.

It "landed in the coastal area of Misrata, most likely in the sea or on the shore," she said, adding "we are not aware of damage or casualties."

The mood around Tripoli's iconic Green Square, renamed "Martyrs Square" by the rebels, had been joyous on Sunday night, with fighters and their supporters dancing and waving the red, black and green flag of anti-regime forces.

But Tripoli residents have since become palpably nervous as the end game plays out.

The rebels are hesitant about how to secure the parts of Tripoli not already under their control: whether to advance through broad boulevards, where they could be vulnerable to sniper fire, or to fight through narrow back streets.