The battle for the oil town of Brega switched from the desert to intense street fighting in the town's northeast on Sunday, as veteran Libyan leader Moammar Gadhafi vowed never to quit and fresh blasts rocked Tripoli.

Rebel forces re-entered Brega -- putting them within sight of a major strategic victory -- but said they had not yet managed to wrest control of the town from Gadhafi's troops, who have held it since April.

Embattled Libyan leader Moammar Gadhafi on Saturday told those calling on him to go that he would never leave the land of his ancestors and those who have given their lives for him.

"They are asking me to leave. That's a laugh. I will never leave the land of my ancestors or the people who have sacrificed themselves for me," he said in a loudspeaker address to thousands of people in Zawiyah, some 50 kilometers west of Tripoli.

Libyan rebels were poised on Saturday for an attempt to retake Brega after breaching the key oil refinery town's defenses in a probing raid.

Rebel military spokesman Mohammed Zawi told Agence France Presse that a light mobile force had breached loyalist positions around Brega late on Friday, before pulling back for a renewed offensive early on Saturday.

Libyan leader Moammar Gadhafi on Friday said that the recognition by Western and regional powers of the rebel National Transitional Council was of no significance.

"Recognize the so-called National Transitional Council a million times: it means nothing to the Libyan people who will trample on your decisions," he said in a message to thousands of his supporters in Zliten, 150 kilometers east of Tripoli.

Venezuelan President Hugo Chavez on Thursday sent a message of support to embattled Libyan leader Moammar Gadhafi, urging him to resist and calling on European nations to worry about their own domestic issues.

"There is Gadhafi resisting. Until when will this outrage last?" Chavez said at a meeting of his ministers. Part of the event was broadcast on the state television network VTV.

Libyan leader Moammar Gadhafi has a "suicidal plan" to blow up the capital Tripoli if it is taken by rebels, the Kremlin's special envoy to Libya told a Russian newspaper Thursday.

"The Libyan premier told me: if the rebels seize the city, we will cover it with missiles and blow it up," Kremlin envoy Mikhail Margelov said in an interview with the the Izvestia daily.

Libyan rebels repulsed loyalists who had retaken the desert hamlet of Gualish on Wednesday and chased them to the outskirts of Asabah, shelling the town from nearby hills, an Agence France Presse correspondent said.

The rebel breakthrough came as an insurgent commander downplayed talk of a political solution, saying strongman Moammar Gadhafi refuses to go.

A political settlement to the Libya conflict is "beginning to take shape", French Prime Minister Francois Fillon told parliament on Tuesday.

"A political solution in Libya is more indispensable than ever and it is beginning to take shape," he said, as lawmakers debated prolonging France's role in the bombing campaign against Libyan ruler Moammar Gadhafi's regime.

French and Libyan officials talked up Tuesday the chances of negotiating Moammar Gadhafi's withdrawal from power and an end to the conflict wracking his country, after months of military stalemate.

Gadhafi's own prime minister told a French daily that the embattled regime was ready to begin talks with Paris and Libyan rebels "without preconditions" and without the interference of its authoritarian "Guide".

France has made indirect contact with Libyan strongman Moammar Gadhafi's regime, the foreign ministry said Monday, denying reports that Paris has begun direct negotiations with Tripoli.

Paris is a leading member of the NATO-led international coalition bombing Gadhafi's forces and a cheerleader for the rebel National Transitional Council (NTC) battling to overthrow his rule.