The rebels said they had withdrawn from the coastal town of Bin Jawad, occupied Saturday in an advance westward on Sirte, Kadhafi's home town, after clashes which a doctor said left at least 14 wounded.

Thousands celebrated in Tripoli as state television channel Allibiya said government forces had taken control of the country's third city of Misrata, the key oil centre of Ras Lanuf and even Tobruk near the Egyptian border.

AFP reporters in Ras Lanuf, taken by rebels early on Saturday, confirmed the town was still in rebel hands despite being hit by air strikes early Sunday.

But residents in Misrata said government tanks had begun shelling the town.

A rebel officer, Colonel Bashir al-Moghrabi, told reporters in earlier in Ras Lanuf rebels were still in control in Misrata as well as Zawiyah, west of Tripoli, where fierce battles took place on Saturday.

A member of the rebel-appointed council in Tobruk, Fateh Faraj, contacted by AFP, also said claims that that town had fallen were "not true."

Doctors rushing the wounded to treatment in Bin Jawad said the rebels were ambushed by Kadhafi loyalists hiding in houses.

A French journalist shot in the leg, but not thought to be seriously wounded, told AFP he had been driving with rebel fighters towards Bin Jawad when they came under fire.

The rebels had vowed to march on Sirte from Bin Jawad, which was the furthest point AFP saw them deployed along the Mediterranean coast on Saturday.

Asked when they would move on Sirte, Moghrabi said, "We don't know. All the soldiers are coming from Benghazi. We are more than 8,000 men."

Two attacks by lone warplanes targeted a checkpoint on the eastern edge of Ras Lanuf and a rebel camp set up in a former military barracks in the centre.

Rebels responded with anti-aircraft fire and there were no immediate reports of casualties, but a huge explosion was heard later in the town.

On Saturday the rebels shot down a loyalist fighter-bomber near Ras Lanuf, killing the two pilots, according to a video clip seen by AFP.

Britain's Defence Secretary Liam Fox said Sunday that a 'small British diplomatic team' was in Benghazi amid reports rebels in eastern Libya were holding a British special forces unit and junior diplomat.

"I can confirm that a small British diplomatic team is in Benghazi. We are in touch with them but it would be inappropriate for me to comment further on that for reasons I am quite sure you understand," Fox told BBC television.

Earlier, The Sunday Times newspaper, citing sources, said the Special Air Service (SAS) soldiers, thought to be up to eight men, were captured along with the diplomat they were escorting through the rebel-held east.

Although the reports of a government military offensive were belied on the ground, it was clear that a propaganda offensive was under way.

In apparently orchestrated scenes in Tripoli, around 4,000 people flooded into Green Square. Military and para-military forces fired their weapons into the air, unconcerned about falling bullets.

"We are shooting to celebrate because we are beating Al-Qaeda. We have won, Al-Qaeda is gone," one soldier told AFP.

Women and children joined the crowds, and an AFP reporter witnessed children as young as seven firing pistols in the air.

"Water, biscuits and portraits of Kadhafi are being distributed to the crowd" the correspondent said.

The rebels on Saturday declared themselves Libya's sole representative on the world stage.

The national council -- the embryonic provisional government -- made its proclamation at a meeting in Benghazi, the rebel stronghold in the east of the North African country.

"The council declares it is the sole representative all over Libya," former justice minister Mustafa Abdel Jalil said.

Abdel Jalil, one of the first high-profile Libyans to defect from Kadhafi's four-decade regime when the uprising began last month, has been appointed chairman of the 30-member body.

Meanwhile, Kadhafi's government asked the Arab League to reverse a February 22 decision suspending it from the organisation's meetings, Deputy Foreign Minister Khaled Kaaim said.

Kadhafi told the French weekly Le Journal du Dimanche he wanted the United Nations or the African Union to probe the unrest and promised: "We will let this panel work unhampered."

Kadhafi also said three Dutch soldiers captured by his forces in northern Libya during an unauthorised rescue mission were being held prisoner.

In his interview with Le Journal du Dimanche, Kadhafi also underscored that the violence posing the greatest challenge to his long rule would have serious repercussions for Europe, which has been facing an uphill battle to stem clandestine immigration, especially from North Africa and Asia.

"Thousands of people from Libya will invade Europe," he said, "and there will be no one to stop them."

An estimated 100,000 migrants have crossed the Tunisian border with Libya since February 20, Tunisian officials said.

earlier related report
Air strike on rebel-held Libyan oil town
Ras Lanuf, Libya (AFP) March 6, 2011 - A warplane struck Ras Lanuf on Sunday, just minutes after rebels holding the Libyan oil town scoffed at state-owned television claims of its recapture by regime loyalists.

"There were two rockets. There are no injuries, no damage," said Abdal Sharif, one of the rebels fighting the regime of Libyan leader Moamer Kadhafi.

Anti-aircraft guns at the checkpoint opened fire and people ran out into the street near the oil compound, an AFP reporter said.

AFP reporters saw two craters measuring two metres (six feet) across, about 20 metres from the road and 50 metres from the checkpoint.

Just minutes earlier, Colonel Bashir al-Moghrabi, one of the rebel leaders in Ras Lanuf, rubbished claims that Kadhafi's forces had retaken the strategic oil site.

"Kadhafi says they took back Ras Lanuf, but we are still here in Ras Lanuf and not only here, but further (west)," he told reporters outside the only hotel in the town.

AFP correspondents are among a number of foreign journalists staying in a hotel on the western outskirts of Ras Lanuf and there were no sounds of any fighting around the town during the night.

"There were no clashes during the night, the town is under our control," another rebel fighter told AFP.

A Libyan state television channel had reported earlier that the town had been recaptured by loyalist forces, along with the third city of Misrata, between Tripoli and Sirte, and Tobruk, which controls the road to the Egyptian border.

Those claims set off celebrations in the capital Tripoli as soldiers fired their weapons into the air and drivers honked horns and waved national flags, a scene foreign journalists in the city were invited to witness.

"We are shooting to celebrate because we are beating Al-Qaeda. We have won, Al-Qaeda is gone," one soldier told AFP.

The rebels have vowed to march on Sirte, Kadhafi's home town about 150 kilometres from Bin Jawad, which was the furthest point AFP saw them deployed along the Mediterranean coast on Saturday.

Asked when they would move on Sirte, Moghrabi said: "We don't know. All the soldiers are coming from Benghazi" but said the rebels believe regime loyalists were reinforcing themselves in the symbolic town.

He claimed there were 8,000 rebel fighters deployed from the Egyptian border to Nofilia, just a short distance from Bin Jawad.

"We are not going to Sirte to kill our brothers. We have communication with our brothers in Misrata and Zawiyah and they say it's in our control also."

Asked about reports that Kadhafi loyalists were approaching, Moghrabi said: "Yes, it's true. We had the information yesterday. We think they're in Sirte now."

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