Libyan rebels captured a key oil refinery in the strategic city of Zawiya near Tripoli, where fighting has been ongoing for several days.
Reporters escorted around the complex by rebel fighters reported no sign of Qaddafi troops, and dozens of rebel groups could be seen milling around.
There were no snipers, and the nearest fighting was at least 3-4km away, reporters said.
This contradicts a statement by the Libyan PM who said earlier that government forces were in control.
The loss of Zawiya is a strategic and psychological blow to eccentric strongman Muammar Qaddafi's supporters. The refinery - and the symbolic city itself - has been a strategic target of opposition forces for some time.
Zawiya sits on a critical supply route for the Qaddafi regime used to bring fuel and other supplies into the country from Tunisia and Algeria.
Rebels also appear to be consolidating their gains in Zawiya itself with the Libyan army having been pushed back to the outskirts.
If opposition forces maintain control of the town, they will have Tripoli surrounded by land, with Nato - which has been enforcing a UN-mandated no-fly zone to protect civilians since March - blocking the sea.
The rebel political leadership has said they expect Qaddafi will be be out of power by August.
The rebel gains come as reports circulate the eccentric Qaddafi may be feigning illness as a ruse to try to leave the country with a semblance of dignity.
Previously, Qaddafi threatened he would die a martyr and 'blow Tripoli up' should rebel fighters enter the city.
Earlier this week, Qaddafi's interior minister Nassr al-Mabrouk Abdullah arrived in Cairo with 9 family members on a tourist visa prompting speculation he was defecting.