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Loyalists of Moammar Gadhafi doggedly resisted attacks in two areas of the fugitive strongman's hometown Sirte on Thursday as doubts emerged about reports of the capture of his feared son Mutassim.
An announcement by the new leadership in Tripoli that Mutassim was in custody, sparked late-night celebrations in towns and cities across Libya but a senior military commander inside Sirte said that the son remained on the run.
As he spoke, intense machinegun and rocket exchanges raged between new regime troops and Gadhafi diehards in two residential neighborhoods in the northwest of the Mediterranean coastal city, an Agence France Presse correspondent reported.
"It is not true that Mutassim was captured," said Wesam Bin Hamid, brigade commander of the Martyrs of Free Libya Brigade, one of the new regime's main units inside Gadhafi's hometown.
"But some prisoners we have captured are saying that Gadhafi (himself) is in Sirte," Bin Hamid added.
A top adviser to the new Libyan leadership, Abdelkarim Bizama, had said in Tripoli late on Wednesday that the feared Mutassim, who served as Gadhafi's national security chief, was in custody.
"Mutassim Gadhafi was captured at Sirte and was transferred to Benghazi," Libya's second-largest city where significant parts of the new leadership remain based, Bizama told AFP.
"We did not announce the capture earlier to avoid that (his family or aides) try to free him," he added.
The announcement sparked celebratory gunfire in both Tripoli and the anti-Gadhafi stronghold of Misrata, Libya's third-largest city, which withstood a devastating siege by his forces during the uprising that ended his 42-year rule.
Gadhafi loyalists put up ferocious resistance on Thursday in the Dollar and Number Two neighborhoods of Sirte, with intense rocket and heavy machinegun fire causing casualties among the advancing new regime troops, an AFP correspondent reported.
"The fighting has narrowed down to these two neighbourhoods," Yahya al-Moghasabi, a Free Libya Brigade field commander, told AFP.
"We believe it will take another three days to capture them," he added.
"We are not going very aggressively into these neighborhoods because there are still families inside them."
NATO said its aircraft hit two military vehicles in Sirte on Wednesday and one more in the other remaining bastion of Gadhafi forces -- the desert oasis of Bani Walid, southeast of Tripoli.
New regime fighters said they had captured the Gadhafi regime's top cleric as he attempted to flee Sirte on Wednesday with his beard shaved off to disguise his appearance.
Khaled Tantoosh, who served as the mufti of Libya under Gadhafi, made broadcasts in support of the fugitive strongman through the long uprising that ended his 42-year rule.
"We captured him yesterday morning," said fighter Abdu Salam, who said he stopped the cleric's vehicle with four comrades on the coast road west out of Sirte.
"He had completely changed his appearance. He was clean-shaven and was driving out and trying to escape to Tripoli," he said.
Medics in the main field hospital on the western side of Sirte said that six new regime fighters were killed and 67 wounded as they closed in on the two districts in fierce exchanges on Wednesday.
The new regime began its siege of Sirte on September 15 before launching what it termed a "final assault" last Friday that has seen at least 91 of its troops killed and hundreds wounded, according to medics.
The city's main square and waterfront are now under the new regime's control, along with its showpiece conference center, university campus and main police station and hospital.
The new leadership has said it will not proclaim the liberation of Libya and begin preparing for the transition to an elected government until Sirte has fallen.
The National Transitional Council's oil and finance minister Ali Tarhuni said Libya would not award any further oil contracts until an elected government was formed.
"The only government that can give new concessions in oil is an elected government, and that would be after we have a constitution," he said.
Libya's oil production, which collapsed following the uprising in February, is expected to rise from current levels of around 400,000 barrels per day, to nearly one million by April, said Nuri Berruien, president of the state-run National Oil Company (NOC).
"We are shooting to go back to previous levels of 1.6-1.7 million, hopefully before the end of 2012," he said.
