Demoralized rebel fighters tried to regroup outside the coastal oasis town of Bani Walid after being beaten back by snipers and gunners loyal to Muammar Qaddafi holding the strategic high ground.
The defeat at Bani Walid is the second in a week for rebel forces, where fractious rebel commanders admitted they had a loss of discipline during the heavy street-by-street fighting of the first assault.
The commanders, unable to overcome mistrust between the various militias on the scene, as well as ambition to claim sole glory for victory in one of Qaddafi's last bastions, had decided to wait for reinforcements.
But a surprise attack on a rebel field hospital by the town's defenders Friday led to a second ad hoc assault by rebel fighters who attempted to storm the town in a chaotic offensive.
The rebel fighters, numbering some 1,000, advanced pell-mell into withering sniper fire by entrenched defenders whose numbers may be on par with their own.
The loyalists hold the strategic high ground along the ridges overlooking a desert valley called Wadi Zeitoun that divides the city between northern and southern sections.
From there it was a simple matter for loyalists to bloody the rebel fighters trying to move down through the northern half of the city and into the valley, which is irrigated with olive groves.
The terrain has made the city a historical hold-out: In the early 20th century, Italian forces occupying Libya struggled to take Bani Walid.
“This may be the worst front Libya will see,” Osama Al-Fassi, who joined other rebels, gathered at a feed factory outside the city’s northern edge, where they drank coffee and took target practice at plastic bottles, told Reuters.
On Saturday evening, Qaddafi forces blasted fighters at the northern entrance with snipers and mortar fire, prompting the rebel forces to battle their way in once again in an unplanned advance, said Bilqassim el-Imami, one of the fighters.
They made their way back to the edge of Wadi Zeitoun amid heavy fire with anti-aircraft machine guns.
A 50-year-old civil servant fleeing Bani Walild with his family, Ismail Mohammed, told AFP the pro-Qaddafi forces inside Bani Walid were "too strong."
“The youth wanted this revolution and sometimes you can’t control your own son,” Mohammad said, suggesting there was a generational divide between young people strongly behind the uprising and older Libyans deeply skeptical about the revolution in the town.
Elsewhere, rebel forces mounted a large offensive on fugitive strongman Muammar Qaddafi's home town of Sirte, where it is reported they are struggling to take ground against stiff resistance.
The sharp resistance in the two Qaddafi hold out cities has raised fears of a protracted insurgency of the sort that has played out in Iraq and Afghanistan, even as the transitional government struggles to exert authority and move toward eventual elections.