Libyan rebels said on Sunday they were firmly in control of the town of Bir al-Ghanam, a staging post about 80 km (50 miles) south of Tripoli, rejecting a government assertion they had been pushed back.
A small settlement in the desert, Bir al-Ghanam is also the closest point the rebels have come to Muammar Qadhafi's stronghold in the capital, lending it a strategic role in the rebels' six-month campaign to end Qadhafi's rule.
Rebel commanders in the region said on Saturday they had seized control of Bir al-Ghanam in an offensive in which four anti-Qadhafi fighters had died.
Taking the town - which lies on a highway leading north to the Mediterranean coast and on to Tripoli - would break weeks of stalemate during which rebels have been unable to make big advances despite Nato air strikes on government forces.
Libyan Prime Minister Al-Baghdadi Ali Al-Mahmoudi said on Sunday that rebels, under Nato air cover, had seized Bir al-Ghanam temporarily but they had been driven out by local volunteers and Libyan forces.
"This is exactly what happened in Bir al-Ghanam, which is back in the hands of the honourable and brave local tribes and under the legitimate control of the government of Libya," he told a news conference in Tripoli.
But a local commander rejected that version of events. "Qadhafi is a liar because Bir al-Ghanam is under our control," Colonel Juma Ibrahim, a rebel commander from the nearby town of Zintan, told Reuters. "We are still in the same position we were yesterday."
He said that in the past 24 hours rebel forces had, in fact, pushed about 10 km (6 miles) north-east of Bir al-Ghanam, and were now planning to push towards the coastal town of Zawiyah.
Zawiyah, which lies 50 km (30 miles) west of Tripoli, has been the scene of two uprisings which were smashed by Qadhafi's security forces. A large contingent of the rebels fighting around Bir al-Ghanam are from Zawiyah. It was not immediately possible to verify independently who was in control of Bir al-Ghanam.
Most analysts say that Qadhafi will eventually be forced to relinquish power if Nato states and their rebel allies maintain the pressure on him by starving him of weapons, fuel and cash and attacking his forces.
However, some alliance members are unsettled by how long the Libyan campaign is dragging on and how much it is costing, especially at a time of economic uncertainty. If Nato wavers, this could give Qadhafi an opportunity to hold on to power.