An attack by Libyan forces loyal to Muammar Gadhafi on a weapons dump near Benghazi killed 17 people on Friday, Al Jazeera television reported.
The attack brings the total number of people reported to have been killed in fighting in two key cities in Libya on Friday to 47, as Libyan forces attempt to wrest back control of areas taken over by anti-government rebels.
In the west, security forces loyal to the Gadhafi recaptured parts of Zawiyah, a town near the capital Tripoli that has for days been defying his rule, and residents said at least 30 civilians had been killed, including the town's rebel commander.
The rebellion in Zawiyah -- the closest rebel-held territory to the capital and the site of another oil refinery -- has been an embarrassment to the authorities who are trying to show they control at least the west of the country.
Rebels have already seized control of eastern regions of the country, around the city of Benghazi, the center of the popular revolt against his four decades of rule.
The uprising against Gadhafi is the bloodiest yet against a long-serving ruler in the Arab world, and the cut in Libya's 1.6 million bpd oil output is a major blow to its oil-dependent economy.
In another key location, the oil town of Ras Lanuf, armed rebels said they drove Gadhafi's forces out of the town, but Libya's deputy foreign minister said it remained firmly in government hands.
Ras Lanuf lies about 660 km east of Tripoli, which is considered Gadhafi's stronghold.
The fighting appeared to confirm the division of the vast desert oil-producing state between a western area round the capital Tripoli held by forces loyal to Gadhafi and an eastern region held by those rebelling against his four-decade rule.
In Zawiyah, "dozens were killed and more were wounded," by pro-Gadhafi forces, said Mohamed, a resident. "We have counted 30 dead civilians."
The loyalist forces used grenade-launchers, heavy machine guns and snipers on the roof of a new hotel to fire at protesters when they marched after Friday prayers to demand the fall of the regime, Mohamed said.
An improvised rebel force had withdrawn to the central Martyrs Square, and government troops were 4-5 kilometers away, a rebel spokesman said.
A Libyan government official said of the town: "It's been liberated, maybe there are still some pockets (under rebel control) but otherwise it's been liberated."
In the east, rebels reiterated that their forces had taken Ras Lanuf, which lies on a strategic coastal road, hours after saying they had captured the town's airport.
"We have taken Ras Lanuf 100 percent, Gadhafi's forces have all left," rebel soldier Hafez Ibrahim said from the town. He did not say who controlled the nearby military base and oil terminal.
A deputy foreign minister in Tripoli, however, told reporters that government forces still held the town.
Rebels seized control of much of the rest of eastern Libya, the main oil-producing part of the country, in a popular uprising centered on Benghazi, Libya's second city.
Speaking about the bombing on the arms depot neat Benghazi, a resident said "a lot of people have been killed. There are many people in the hospital. No one can approach, it's still very dangerous."
The uprising against Gadhafi is the bloodiest yet against a long-serving ruler in the Arab world, and follows the ousting in the past weeks of the long-time presidents of both Tunisia and Egypt -- Libya's western and eastern neighbors.
The cut in Libya's 1.6 million barrel per day oil output -- caused partly by the flight of thousands of key foreign oil workers -- is a major blow to its economy.
News of the fighting pushed up U.S. crude prices to their highest levels since September 2008, and Brent crude futures for April delivery rose e1.36 to e116.17 a barrel.
The International Energy Agency said one million barrels per day (bpd) of Libya's oil output was shut, the top of the range it had estimated on Wednesday.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now