At least two have been killed and several others wounded by rockets fired from embattled Libyan strongman Muammar Qaddafi's compound in Tripoli.
Fierce fighting broke out late yesterday between Qaddafi loyalists and rebels close to his large Bab al Aziziyah complex, where the regime's leader is thought to be hiding.
Smoke was later seen coming from the compound - and Nato jets were flew overhead - but the alliance would not confirm whether the planes had bombed the base.
Reports on the ground say Qaddafi's attacks appear fairly indiscriminate and appeared to be targeting the civilian population.
"This has caused a lot of distress in the hospital and amongst the rebel fighters," said Alex Crawford of SkyNews.
She said a rebel convoy of about eight to 10 vehicles headed to the area of the Gaddafi complex.
"They were planning to attack the compound today. I don't think they were planning to do it quite so early."
"But when they had incoming shelling from the Gaddafi compound and this resulted in these casualties, it was very emotional and it seemed to fire-up the rebels."
For Qaddafi, who previously vowed to blow Tripoli up should rebels enter the city, and who pledged to die on Libyan soil, drawing the rebels into an emotional, bloody fight may be what he wants.
A Nato spokeswoman said: "Remnants of the regime are desperate and maybe are trying to fight back but they are fighting a losing battle."
The alliance also claimed it would continue with its Libya operations as long as Qaddafi forces keep fighting, but the urban nature of the battle in Tripoli, and the close proximity of rebel fighters to the compound, is likely to complicate its ability to target Qaddafi's tanks in the capital - or his command and control communications network.
There is at least one tank outside Qaddafi's Tripoli complex, which is hundreds of meters square, and guarded from the roof-tops by snipers. It is unknown how many more tanks may be inside the compound, which has roads and three inner walls protecting it before people get to the main building right in the middle.
The compound also has underground bunkers, and some say tunnels Qaddafi could use to escape to his home-town, which remains in loyalist hands. It is said to be garrisoned and well supplied with arms and munitions.
Armor and the ability to coordinate are liable to be a thorn in the rebels side and a boon for Qaddafi. Tripoli's mobile phone network comes and goes. There is no electricity for television. Few fighters have walkie-talkies or satellite telephones.
As the rebels prepare to mount the offensive Qaddafi is demanding of them, most Libyans can only pray it ends quickly with a minimum of blood.