Rebel forces in Libya say they have retaken the eastern oil town of Brega, capturing a number of elite government troops and killing others.
The statement has not been independently confirmed.
It came hours after the rebels had themselves been driven from the town by air and ground attacks by forces loyal to Libyan leader Col Muammar Gaddafi.
Elsewhere, the rebel-held town of Ajdabiya is reported to have come under heavy aerial bombardment.
On the diplomatic front, France is stepping up its efforts to persuade the United Nations Security Council to impose a no-fly zone over Libya, a proposal backed by the UK and the Arab League.
The rebel military commander based in Libya's second city, Benghazi, has also appealed for a no-fly zone, saying his fighters have no answer to Col Gaddafi's air power, says the BBC's Jon Leyne from the rebel stronghold.
The British Foreign Secretary, William Hague, has said Libya risks becoming a "pariah state" if Col Gaddafi holds on to power.
"If Gaddafi went on to be able to dominate much of the country, well this would be a long nightmare for the Libyan people, and this would be a pariah state," he told BBC Radio 4's Today programme.
Mr Hague will attend a meeting of G8 foreign ministers in Paris later in the day to examine options for Libya as rebel efforts to end Col Gaddafi's four-decade rule appear to falter.
Rebel stronghold
With fighting continuing in the east of Libya, it is not clear exactly where the front line is. Brega changed hands several times over the weekend, amid a relentless barrage of air and ground attacks by government forces.
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Then reports came through on Sunday evening that a special forces unit loyal to the rebels had retaken part of the key oil city, but it is not clear whether they can hold on to it.
Pro-Gaddafi forces also launched air strikes on the rebel-held town of Ajdabiya after sweeping east, rebels said.
Ajdabiya is the only sizeable town between the front line around Brega and the rebel stronghold of Benghazi.
International diplomatic pressure is growing for a no-fly zone over Libya, after the Arab League agreed to ask the UN Security Council to enforce such a zone on Saturday.
The policy would be aimed at preventing Col Gaddafi's forces using warplanes to attack rebel positions, although no clear position has emerged on exactly how this would be achieved.
Nato has previously cited regional and international support for the idea as a key condition before it could possibly go ahead.
Russia and China, which wield vetos on the UN Security Council, have expressed serious reservations on the issue. But on Monday, Russian Foreign Minister Sergei Lavrov said he wanted more information on the Arab League proposal.
Turkey, the only Muslim member of Nato, has strongly opposed the idea.
"We have seen from other examples that foreign interventions, especially military interventions, only deepen the problem," Turkish Prime Minister Recep Tayyip Erdogan said in Istanbul.
"Therefore we see a Nato military intervention in another country as extremely unbeneficial and, moreover, are concerned that it could create dangerous results," said Mr Erdogan.
On Sunday, Human Rights Watch said Libyan authorities had carried out a wave of "arbitrary arrests and forced disappearances" in the capital, Tripoli.
The group said that Libyan security forces had arrested scores of protesters and suspected government critics in Tripoli, adding that some of them had been tortured.
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