By Angus MacSwan
AJDABIYAH, Libya (Reuters) - Libyan rebels backed by allied air strikes retook the strategic town of Ajdabiyah on Saturday after an all-night battle that suggests the tide is turning against Muammar Gaddafi's forces in the east.
Western warplanes bombed the outskirts of Misrata further west to stop Gaddafi forces shelling the city, a rebel spokesman said. One inhabitant said 115 people had died in Misrata in a week and snipers were still shooting people from rooftops.
In Ajdabiyah, rebel fighters danced on tanks, waved flags and fired in the air near buildings riddled with bulletholes. Half a dozen wrecked tanks lay near the eastern entrance to the town and the ground was strewn with empty shell casings.
There were signs of heavy fighting at Ajdabiyah's western gate. The decomposing bodies of more than a dozen Gaddafi fighters were scattered on the ground. An abandoned truckload of ammunition suggested Gaddafi forces had beaten a hasty retreat.
"All of Ajdabiyah is free and all the way to Brega is free," said Faraj Joeli, a 20-year-old computer science student turned rebel fighter.
Capturing Ajdabiyah, a gateway from western Libya to the rebel stronghold of Benghazi and the oil town of Tobruk, was a big morale boost for the rebels after two weeks on the back foot.
Western governments hope the raids, launched a week ago with the aim of protecting civilians, will also shift the balance of power in favor of the Arab world's most violent popular revolt.
The rebels say they have been asking for arms from abroad to fight the better-equipped Gaddafi forces but have received none.
A Reuters correspondent in Ajdabiyah said it seemed clear that air attacks there on Friday afternoon had been decisive.
Gaddafi's better-armed forces halted an early rebel advance near the major oil export terminal of Ras Lanuf two weeks ago and pushed them back to Benghazi, until Western powers struck Gaddafi's positions from the sea and air.
Witnesses and rebel fighters said the Gaddafi forces had now retreated from Ajdabiyah toward the oil town of Brega.
SHELLING EASES AFTER STRIKES
Shelling by Gaddafi forces in Misrata, western Libya, eased after they were bombed by foreign warplanes, rebel spokesman Abdelbasset Abu Mzereiq told Reuters by telephone from the city.
Misrata is the only big rebel stronghold left in the west of Libya and it is cut off from the main rebel force fighting Gaddafi's troops in the east. It has been encircled and under bombardment for weeks.
"There was heavy shelling earlier. We know the allied planes have made several raids and bombed several locations in the outskirts. We know they bombed an ammunition site inside the air base (south of the city)," said Mzereiq.
A rebel spokesman in Benghazi said two civilians in Misrata were killed by shelling on Saturday morning and six injured.
Rebels said aid organizations were able to deliver some supplies to Misrata but were concerned about the snipers.
U.S. President Barack Obama told Americans on Saturday the allied mission in Libya had saved countless lives.
"When the international community is prepared to come together to save many thousands of lives, then it's in our national interest to act," Obama said in a weekly radio address.
In Tripoli, explosions were heard early on Saturday, signaling possible new strikes by warplanes or missiles.
Libyan state television was broadcasting occasional, brief news reports of Western air strikes. Mostly it showed footage -- some of it grainy images years old -- of cheering crowds waving green flags and carrying portraits of Gaddafi.
Neither Gaddafi nor his sons have been shown on state television since the Libyan leader made a speech from his Tripoli compound on Wednesday.
State TV said the "brother leader" had promoted all members of his armed forces and police "for their heroic and courageous fight against the crusader, colonialist assault."
The African Union said it was planning to facilitate talks to help end the war, but NATO said its operation could last three months, and France said the conflict could go on for weeks.
(Reporting by Alexander Dziadosz in Benghazi, Tim Castle in London, Maria Golovnina and Michael Georgy in Tripoli and Ibon Villelabeitia in Cairo; writing by Tom Pfeiffer; editing by Andrew Roche)