A Libyan rebel fighter is seen at green square, renamed Martyr's square by rebels in Tripoli August 23, 2011. Reuters

Libyan rebels are advancing towards the city of Sirte, where parties still loyal to Moammar Gadhafi are offering strong resistance.

According to reports, about 1,000 Gadhafi supporters are exchanging heavy gun and rocket fire on the road leading to Sirte as rebels bring along reinforcements.

Rebels have already taken control of most of the capitol city of Tripoli and are now seeking to grab Gadhafi’s hometown, which is still firmly in control of the government.

Loyalists are also holding onto the towns of Sabha and Bin Jawad.

Gadhafi's forces are still fighting, we are surprised. We thought they would surrender with the fall of Tripoli, rebel commander Fawzi Bukatif said, according to Agence France Presse.

Gadhafi’s whereabouts are a mystery, though rebels believe he is in or near Tripoli. According to a report in the Daily Telegraph newspaper, rebels have entered Gadhafi's network of underground tunnels in the city which are believed to have passages to the sea and the airport.

Paris Match magazine reported that Libyan rebel commandoes came close to capturing Gadhafi in a private Tripoli house he was believed to be hiding in.

Separately, the head of the rebel movement, Mahmoud Jibril said his National Transitional Council's (NTC) is seeking about $2.5-billion in foreign aid. Italy’s Prime Minister Silvio Berlusconi (a former friend and ally of Gadhafi) has pledged to release about $505-million in Libyan assets currently frozen in Italian banks.

Much of that money will be needed for humanitarian costs as well as for funds to repair Libya’s oil infrastructure.

Henry Gray, emergency co-ordinator for the medical charity Medecins Sans Frontieres in Tripoli, told BBC: Libya's got a large number of very well-trained, experienced doctors, surgeons and consultants, but for years it's relied on expatriate nursing staff and paramedical staff, a lot of those have fled the conflict back in April-May. So now there's a huge gap in basic nursing care, in cleaning, in laboratory technicians that type of thing.”

Gray added: The other main need is in the supply of specialist orthopedic equipment, but also in terms of anesthesia drugs, antibiotics for victims of gunshots, explosions, that type of thing.