Libya's interim government forces have renewed their attack on Sirte, one of the last pro-Gaddafi strongholds.
Troops from the National Transitional Council regrouped overnight after making major gains on Saturday. They entered from west and east and, at one stage, were within 1km of the city centre after days of stalemate.
Sirte is Colonel Muammar Gaddafi's birthplace, but it is not known if he is in the city.
The city has always been a hugely symbolic target for the NTC, and it seems close to being won, the BBC reports.
Gunfire could be heard and black smoke was seen rising as NTC soldiers carried out their surprise pincer assault on the city on Saturday.
NATO aircraft hit targets in the Sirte area on Saturday as part of the alliance's United Nations-mandated mission to protect civilians. NATO air strikes have played a major role in the conflict.
The NTC is facing strong resistance in the only other remaining Gaddafi stronghold, Bani Walid to the south-east of the capital, Tripoli.
Colonel Gaddafi went into hiding after Tripoli fell to NTC forces in August, six months into the uprising.
The whereabouts of the former leader - who ruled Libya for 42 years - are unknown. Many of his relatives and aides have taken refuge in neighbouring Algeria and Niger.