By Alexander Dziadosz
RAS LANUF, Libya (Reuters) - Libyan warplanes launched at least four air strikes on a rebel-held town in the east Tuesday as the two sides faced off across a new front line close to major oil export terminals.
The battlefield has become mired in attack and counter-attack between the loose-knit rebel army of young volunteers and defectors, and Libya's army in a buffer zone of barren desert and scrub between east and west.
Rebels were fortifying their positions and stocking up with ammunition and food while reconnaissance teams from both sides assessed each other with binoculars. Earlier, rebel forces had staged a number of forward attacks.
Libyan rebels rejected overtures by a representative of Muammar Gaddafi to negotiate his exit as his grip on power is increasingly challenged. The Tripoli government said talk of such negotiations was "nonsense."
There were four air strikes, one hitting a residential area, on the oil terminal town of Ras Lanuf Tuesday following similar attacks the previous day. No casualties were reported.
"An air strike hit a house in a residential area of Ras Lanuf. There is a big hole in the ground floor of the two-storey home," one witness said. "A massive plume of smoke and dust flew up in the area from the strike. Men rushed to the area shouting 'Allahu Akbar' (God is greatest)."
Many homes, including the one hit, appeared to be evacuated. Families fled the oil town and rebels moved their weapons into the desert due to fears of a government forces ground attack.
Officials at rebel headquarters, based in Libya's second city of Benghazi where the uprising against Gaddafi began, said there had been talks about Gaddafi stepping down.
"I confirm that we received contact from a Gaddafi representative seeking to negotiate Gaddafi's exit. We rejected this," a media officer for the rebel Libyan National Council, Mustafa Gheriani, told Reuters.
"It's over, we won't negotiate with him at all. I think he has no other way. He has to die or find a place to go. It's either us or him. We don't have anything to negotiate about," said Iman Bugaigis, a revolutionary official in Benghazi.
In defiant speeches, Gaddafi has vowed to fight on and has said he will never leave Libya and end his 41-year-old rule.
Rebels, who have set their sights on Gaddafi's reinforced hometown of Sirte further west, said government forces had dug in their tanks near the town of Bin Jawad while rebels retreated to Ras Lanuf and set up a forward checkpoint.
The two towns are about 60 km (40 miles) apart on the strategic coastal road along the Mediterranean that leads to Gaddafi's stronghold of Tripoli.
One of the first air strikes struck near a rebel checkpoint close to a residential district, shattering a water supply pipe.
Mustafa Askat, an oil worker who was at the site, said: "Yes I saw it, it was at 11 this morning." He said the attack would affect water supplies to the city.
"We have a hospital inside, we have sick people and they need water urgently," he said.
Rebels fired at the aircraft, chanting anti-Gaddafi slogans. One mimicked a line from one of his recent speeches in which he urged Libyans to defend against "terrorists" in their midst: "Alley to alley, house to house, oh Muammar, you donkey!"
Hundreds of people have died in the uprising that started in mid-February and some countries are pushing to impose a no-fly zone that would keep Gaddafi's warplanes and attack helicopters grounded and remove his advantage of controlling the air space.
There was a tense stalemate on the battlefield Tuesday.
"Our last checkpoint is still in the same place. We've launched some forward attacks though. Es Sider is in our control," rebel fighter Hussam al-Rammahi told Reuters. "Gaddafi's forces haven't moved either.
Another rebel, Adel Yahya, said: "We're about 10-15 km (6-10 miles) out from Ras Lanuf where the Es Sider oil company is. We're in control there."
With the euphoria of their rapid advance halted by the government forces' counter-attack and subsequent impasse, rebels were less inclined to pose for pictures and talk to reporters.
"We can't give you information because we'll be targeted by jets," said rebel fighter Hatem Firjani. "If I tell you our forces are 3 km ahead, we'll get bombed 3 km ahead," said fighter Moh'd Faituri.
Es Sider, like other towns along the coast such as Ras Lanuf, Zueitina and Brega, has an oil terminal. Es Sider lies right in the frontline area, and it was not possible independently to confirm the presence of rebels there.
Oil sources said Monday that Ras Lanuf and Brega ports were not working due to the military activity.
The largely inexperienced rebels lack the firepower of their rivals. They have no warplanes to back them up and rely mostly on heavy machine guns, anti-aircraft weapons and rocket propelled grenades. They travel by 4x4 pick-up trucks.
But their agility, often fairly chaotic at the front, has given them a degree of protection from Gaddafi's forces, who have proved more effective at quashing the rebellion in the west around the Libyan leader's Tripoli powerbase.
(Additional reporting by Mohammed Abbas; Writing by Edmund Blair and Peter Millership in Cairo; Editing by Giles Elgood)