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The explosion hit the eastern exit of Ajdabiya, a town south of Benghazi, a military source said. It is close to the oil export ports of Brega and Zueitina.
No further details or claim of responsibility were immediately available. Some six cars were damaged by the blast, a witness said.
The town is controlled, as is much of eastern Libya, by forces of Khalifa Haftar allied to a parallel government based in the east.