Libyan rebels are massed Sunday outside two cities that remain in the hands of forces loyal to ousted leader Moammar Gadhafi.
Rebels tried to advance Saturday on the town of Bani Waleed, about 90 miles southeast of Tripoli, but the advance was aborted, apparently to clear the way for NATO airstrikes on loyalist positions.
"A large number of people entered Bani Walid, but we had to retreat because of heavy fire," said Abdel-Razak al-Nadouri, a military commander for the former rebels. "NATO asked us to return seven kilometers (three miles) from Bani Walid because they were striking military bases and Grad rocket launchers."
NATO, which has played a key role in decimating Gadhafi's forces over the six-month Libyan civil war, said its jets hit a tank, two armored vehicles and a multiple-rocket launcher the day before near Bani Walid. Airstrikes also pounded targets around Gadhafi's hometown of Sirte, and the towns of Waddan and Sabha in the southern desert, NATO said.
Rebels also met with artillery fire and snipers positioned on hills overlooking a main road. It's unclear how far the rebels will try to push Sunday.
The situation is also fluid around the coastal city of Sirte. Rebel commanders were reportedly positioning more fighters and equipment outside the city, which blocks the main coastal highway between western and eastern Libya.
The rebels' gains have prompted a return of foreign diplomats to the capital, Tripoli, three weeks after Gadhafi's fall.
Turkey, Egypt and Italy are all flying their flags again outside their embassies. The U.S. said it is sending a small diplomatic mission to solidify ties with the new government. The U.S. Embassy was looted and destroyed by pro-Gadhafi forces soon after the Feb. 17 uprising began.
Meanwhile, Mustafa Abdul Jalil, the head of the rebels Transitional National Council, arrived in Tripoli on Saturday. The rest of the interim government is expected to set up shop in the city soon.
On Saturday, the International Monetary Fund recognized the TMC as the country's legitimate government. The former rebels said they are moving quickly to jump-start Libya's oil sector. The interim prime minister said production could resume early next week.
Libyan fighters swept into the capital, Tripoli, on Aug. 21, effectively bringing an end to Gadhafi's nearly 42-year rule.
NPR's Corey Flintoff and Jason Beaubien contributed to this report, which includes material from The Associated Press