The deadline expires on Saturday for forces loyal to ousted Libyan strongman Muammar Gaddafi to surrender, with fighters of the country's new leadership poised to attack hold-out strongholds.

After fierce clashes on Friday in Bani Walid, a Gaddafi bastion southeast of Tripoli, an AFP reporter on the town's eastern front at Sedata some 60 kilometres (40 miles) south of Misrata could hear distant artillery fire.

NATO aircraft could also be heard overhead early on Saturday, he said.

The National Transitional Council (NTC) set the deadline for towns still loyal to Kadhafi to surrender, and on-off talks have been going on for days over Bani Walid.

A number of former regime officials, including Gaddafi's spokesman Mussa Ibrahim, are believed to be holed up there.

NTC chief Mustafa Abdel Jalil was flying on Saturday to Tripoli for his first visit since its fighters seized the capital, an AFP correspondent said.

Abdel Jalil told AFP his visit to Tripoli from NTC headquarters in Benghazi was "temporary" and that the council he heads would be transferred to Tripoli "after the (full) liberation" of the country.

On another front near Bani Walid, NTC forces were massing some 30 kilometres from the town, another AFP reporter said.

Fighters returning from the front reported clashes between NTC "sleeper cells" and pro-Kadhafi forces in and near the town overnight, and said they were reinforcing advance positions amid "fierce resistance" from diehards.

According to chief NTC negotiator Abdullah Kenshil, "the attack will take place, but its timing will be decided by military leaders on the ground."

On Friday, a top NTC commander said "decisive military action" was imminent.

"Up to now these negotiations did not lead to positive results," said Salem Jeha -- a highly influential member of Misrata's military council -- just hours ahead of the midnight deadline.

"If the negotiations fail then there will be decisive action, decisive military action," Jeha, a former colonel in Kadhafi's army, said from the NTC military headquarters in Misrata.

"But where this military action takes place, that is a surprise. We are in position and we can move in any direction and this is our strength."

On Friday ahead of the deadline, fighting erupted in Bani Walid as pro-NTC elements inside the town clashed with Kadhafi forces.

One "revolutionary" fighter was killed and four wounded, while there were three deaths in the ranks of the pro-Kadhafi forces.

An NTC commander said earlier that "fierce fighting between our forces and pro-Kadhafi ones are under way in sectors very close" to Bani Walid.

Columns of smoke and the crump of shelling could be heard by journalists outside Bani Walid as convoys carrying fighters and ammunition headed for the town 170 kilometres (105 miles) from Tripoli.

Meanwhile, on the road to Kadhafi's hometown of Sirte, rebels who had captured Red Valley, 60 kilometres (40 miles) to the east on Thursday, were under counter attack, an AFP correspondent reported.

Speaking for the first time from Tripoli since it was captured on August 23, de facto premier Mahmud Jibril refused late Thursday to speculate on Kadhafi's whereabouts, but acknowledged the conflict would end only with the "capture or elimination of Kadhafi."

The NTC fears Kadhafi will try to slip across one of Libya's porous borders. In a defiant message on Thursday, Gaddafi dismissed as lies reports he had fled to Niger, insisting he was still in Libya.

Niger, which has also denied that he is there, vowed to respect international commitments if wanted former Libyan officials enter its territory.

"We are not talking about (Moamer) Kadhafi, but about those who are already in Niger," Justice Minister Marou Amadou told AFP, insisting that 'we do not know' the fugitive's whereabouts.

Niamey earlier confirmed having allowed a dozen Kadhafi aides, including internal security chief Mansour Daw, into the country for 'humanitarian reasons.'

They are being held under house arrest in Niamey. On Friday, a source from Niger's ethnic Tuareg community in Niamey said a number of Libyan generals loyal to Kadhafi are now in Burkina Faso after transiting Niger.

Interpol issued a 'red notice' for the arrest of Kadhafi, his son Seif al-Islam and his intelligence chief Abdullah al-Senussi after the International Criminal Court asked for the global police agency's help.