After a week of setbacks in east and west that stalled previous gains, Libya's rebels have routed most of strongman Muammar Qaddafi's forces at the strategic oil town of Brega.

According to a rebel spokesman rebel forces have encircled the city, an oil export terminal, from which they were forced to pull back last week, and the main body of Qaddafi's forces have fled.

"The main body [of Qaddafi's forces] retreated to Ras Lanuf [to the west]," the spokesman, identified only as Abdulmolah, told reporters by telephone.

"I am told they have some four-wheel drive trucks with machine guns spread out between Ras Lanuf and Bishr."

But, despite the rebel's declaration of victory, they have yet to secure the city, which reports say has been turned into a minefield.

And there are those Qaddafi forces left behind, who may be planning to force the rebels to fight a bloody, street by street, door by door, engagement to take the city.

Of additional concern is Qaddafi's vow to 'blow Tripoli up' should the rebels take the city, leaving many analysts questioning whether key facilities in Brega, like the oil refinery and chemical plant in Brega, will be sabotaged before the rebels take control.

The renewed attack on Brega could signal a new rebel push westwards into Qaddafi's heartland around Tripoli from their main stronghold in the east of the country after weeks of stalemate.

Brega has changed hands several times in the back-and-forth fighting along Libya's Mediterranean coast since the rebellion began in February.

Rebels say taking it back is the tipping point in the conflict on the eastern front.

In the western mountain region southwest of Tripoli, pro-Qaddafi forces exchanged artillery fire on Sunday with rebels in the village of Qawalish, which the rebels had taken and then dramatically lost to a Qaddafi counter-punch last week.

Qaddafi is refusing to step down despite the five-month-old rebellion against his rule, a campaign of NATO air strikes, and the defections of members of his inner circle.

The slow progress of the rebel military campaign, which many thought would only take weeks, has caused consternation and strains within NATO.

Some member states, like France, have broken with official NATO policy and made direct contact with Qaddafi in the hopes of negotiating a settlement.