Libyan rebels backed by allied air raids say they have seized control of the frontline oil town of Ajdabiya from Colonel Muammar Gaddafi's forces.
The BBC's correspondent in Ajdabiya says there are scenes of jubilation among the insurgents.
Gaddafi loyalists seized the town last week as they advanced east to quell an uprising now in its fifth week.
Saturday's breakthrough came after a seventh night of bombardment by allies enforcing a United Nations-mandated no-fly zone.
Coalition forces pounded Ajdabiya overnight, destroying Gaddafi armoured vehicles and weaponry.
Large explosions were also heard in the Libyan capital Tripoli on Saturday morning.
Gaddafi arming volunteers
Col Muammar Gaddafi is said to be arming volunteers to fight the uprising against his rule, according to a senior US military official.
Vice Admiral William Gortney said Col Gaddafi had "virtually no air defence" and a "diminishing ability to command and sustain his forces on the ground".
Rebels and pro-Gaddafi forces are in a stand-off near the town, witnesses say.
General Carter Ham, the Commander of the U.S. Army Africa Command, says he expects the military operation to be over in the near future.
"I don't think it'll go on for a very long time. We have an opportunity to execute the requirements of the United Nations security council resolution, the most important part of which is to protect civilians. It is important to note that we have already done that to a large degree by stopping the regime's attacks into Benghazi."
Meanwhile, Qatar became the first Arab state to contribute to the air mission over Libya, the BBC reports.
Briefing reporters on Friday, Vice Adm Gortney said Col Gaddafi's forces had been severely weakened by international military action.
"His air force cannot fly, his warships are staying in port, his ammunitions stores are being destroyed, communications towers are being toppled, his command bunkers rendered useless," he said.
"We've received reports today that he has taken to arming what he calls volunteers to fight the opposition," he added.
Western warplanes have bombed Col Gaddafi's tanks and artillery in eastern Libya to try to break a battlefield stalemate and help rebels take the strategic town of Ajdabiyah.
Rebels say they have entered Ajdabiyah from the east, Al Jazeera reported.
Colonel Gaddafi's forces hold on in the west of the town, which commands the coastal road towards Tripoli.
The African Union said it was planning to facilitate talks to help end the war, but NATO said its operation could last three months, and France said the conflict would not end soon.
In Washington, a U.S. military spokeswoman said the coalition fired 16 Tomahawk cruise missiles and flew 153 air sorties in the past 24 hours targeting the Libyan government's artillery, mechanised forces and command and control infrastructure.
Western governments hope the raids, launched a week ago with the aim of protecting civilians, will shift the balance of power in favour of the Arab world's most violent popular revolt.
British Foreign Secretary William Hague said it was difficult to use airpower in Ajdabiya because Colonel Gaddafi's tanks were within the town itself.
The BBC reports the city is strategically important because it commands a coastal highway, linking the east and west of the country.
Military action over Libya to enforce a United Nations 'no-fly' zone, began last Saturday.
Coalition forces are now into their seventh day of military action there.
Twelve countries are now part of the coalition seeking to enforce a UN Security Council resolution passed last week to protect civilians from attack during fighting between rebels and Col Gaddafi's forces.