Black smoke billowed over Sirte as National Transitional Council (NTC) forces massed in Zafran Square, about 1 km from the center of the Mediterranean coastal town.

Gunfire could be heard from the town center as the forces moved tanks and mortars to the square. Pick-up trucks mounted with machine guns and loaded with NTC fighters raced into the town and ambulances hurtled back and forth ferrying casualties.

"They have snipers above the mosques, above the buildings. They're using the houses and public buildings," NTC fighter El-Tohamy Abuzein told Reuters from his position in Zafran Square.

NATO said its warplanes hit a number of targets in Sirte in the last 24 hours, including an ammunition depot and an anti-aircraft gun.

It said in a statement the air attacks had been mounted to protect civilians from Qaddafi forces inside the town.

"Among the reports emerging from Sirte are executions, hostage-taking, and the calculated targeting of individuals, families, and communities within the city," NATO said.

Previously, NTC forces had retreated from Sirte and the other final Qaddafi stronghold, Bani Walid, after poorly organized assaults met fierce resistance from loyalists.

Though NTC forces have tightened their grip in the past few days on southern oasis towns which sided with Qaddafi, that progress has been overshadowed by unsuccessful efforts to take the last strongholds.

NTC commanders say their advance on Sirte has been hampered by the presence of large numbers of civilians, many of whom have fled in the past week.

A Qaddafi spokesman has accused NATO of killing several hundred civilians with its strikes on Sirte. Communications have been largely cut off since the fall of the capital Tripoli last month.