Heavy casualties reported in Libya fighting (Reuters)

FRONT LINE NEAR BIR GHANAM, Libya (Reuters) ? Ten Libyan rebels were reported killed and 172 wounded in an attack on the eastern oil port of Brega on Saturday, while insurgents drove back forces loyal to Muammar Gaddafi in the west.

In the latest of a series of speeches apparently designed to show he enjoys support in the areas he controls, Gaddafi described the rebels as worthless traitors and rejected suggestions that he was about to leave the country.

"They said Gaddafi will go to Honolulu," he said in a televised speech. "This is funny: To leave the graves of my forefathers and my people? Are you serious?"

His defiance came a day after Western and Arab powers, led by the United States, said the rebel leadership was the legitimate government of Libya. Reports have circulated that Gaddafi is seeking a negotiated way out of the crisis.

Brega's oil resources make it a prize for the rebels, who have been trying to dislodge Gaddafi's troops in the face of rocket bombardments, according to Al Jazeera television.

Most opposition fighters are about 20 km (12 miles) outside Brega, kept back by Grad rockets fired by government forces, the network reported. The rebels had however captured four government soldiers.

In the Western Mountains, where insurgents are trying to push toward Tripoli, heavy fighting erupted on Saturday.

Sustained gunfire and volleys of artillery could be heard from the village of Bir Ayad, 15 km (9 miles) south of the front line at the town of Bir Ghanam.

Rebels at Bir Ghanam hold the high ground on the outskirts of the town, their closest position to Tripoli, about 80 km (50 miles) away.

Ahmed, a rebel fighter in Bir Ayad, said a convoy of about 15 vehicles from Gaddafi's forces tried to approach Bir Ghanam, but the rebels fired at it and the convoy retreated after a about an hour of shooting.

"They were in a column at first but when we started firing they split into groups of three or four vehicles and all of them fled," local rebel commander Fathi Alzintani told Reuters.

ASSAULTS REPELLLED

Rebels in the Western Mountains have made progress in recent weeks after repelling assaults by Gaddafi's forces. Their next goal is Garyan, a town that controls the highway south from Tripoli.

But the rebels have been hampered by divisions, ill-discipline and supply problems.

In Misrata, the rebels' main stronghold in the west, six rebel fighters have been killed and four injured in the past 24 hours, hospital staff said.

Away from the battlefield, Gaddafi has made a series of audio speeches to coincide with state television broadcasts of rallies attended by thousands of people in Tripoli and elsewhere.

As loyalists gathered on the streets of the town of Zawiyah, near the capital, on Saturday, Gaddafi said the rebels were "apostates" who had "become Christians."

Calling on the rebels to lay down their arms, he said: "Islam is being humiliated by the cross ... They are burning mosques with bombs."

"We have given martyrs, yes ... It's impossible to compromise or make the slightest concession."

Crowds were shown firing to the air at the end of the speech.

Rebel leaders received a boost in their campaign to oust Gaddafi on Friday when they won recognition as the legitimate government of Libya from the United States and other powers.

Western nations said they also planned to increase the military pressure on Gaddafi's forces to press him to give up power after 41 years at the head of the North African state.

Recognition of the rebels by the international contact group on Libya is an important diplomatic step that could unlock billions of dollars in frozen Libyan funds.

The decision came as reports circulated Gaddafi had sent out emissaries seeking a negotiated end to the conflict, although he remains defiant in public.

The contact group also agreed on a road map whereby Gaddafi should relinquish power and put forward plans for Libya's transition to democracy under the rebel National Transitional Council.

(Additional reporting by Souhail Karam, Andrew Quinn and Ibon Villelabeitia; Writing by Giles Elgood; Editing by Sophie Hares and David Cowell)

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/nm/20110716/wl_nm/us_libya1

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