By Maria Golovnina and Mohammed Abbas
ZAWIYAH/BIN JAWAD, Libya (Reuters) - Libyan government forces launched a second attack on the western town of Zawiyah on Saturday after rebels drove them out in a morning of fierce fighting, while in the east, opponents of Muammar Gaddafi pushed toward his home town.
"The fighting has intensified and the tanks are shelling everything on their way. They have shelled houses. Now they are shelling a mosque where hundreds of people are hiding, Abu Akeel, a Zawiyah resident, told Reuters. "We can't rescue anyone because the shelling is so heavy," he said.
Another resident in the main square told Reuters by telephone: "The attack has started. I see more than 20 tanks." Gunfire could be heard in the background.
It was the second attempt by Gaddafi's forces to win control over the town in a matter of hours. Rebels pushed back an early morning attack in which residents said the government forces had fired high explosive rounds at civilians and dragged people from their homes.
"We captured 3 APCs, two tanks and one pick-up after an hour and a half of fighting," Youssef Shagan, the rebel force spokesman in the town, 50 km (30 miles) west of the capital, told Reuters after the first battle.
People opposed to Gaddafi's 41-year rule have been fighting his forces in Zawiyah for more than a week, after rebels took over large parts of eastern Libya in an uprising inspired by the overthrow of veteran rulers in Egypt and Tunisia this year.
Residents said Gaddafi forces stormed residential buildings and killed people inside to secure the rooftoops for snipers.
A doctor in Zawiyah told Reuters at least 30 people, mostly civilians, had been killed during the morning clashes on Saturday, bringing to 60 the death toll from two days of battles for control of the coastal town.
A reporter for Britain's Sky television said she had seen at eight dead soldiers and five burning armored vehicles in the central square.
The doctor said Gaddafi's tanks had fired at residential buildings and civilian cars trying to flee.
"There is a lot of destruction in the city, I look around and all I see is destruction. Bombed buildings and burning cars everywhere -- I cannot even count how many," he said.
Before the latest fighting, the rebels appeared to have half a dozen armored vehicles, a similar number of anti-aircraft guns and numerous machine guns. One fighter vowed to fight to the death.
"Gaddafi will never enter this city. He will never set foot here. The only way for him to enter the city is when we are all dead. He has to kill us all to control the city," the rebel, who gave his name as Ibrahim, said by telephone.
Rebels in eastern Libya said they were pushing further west after driving forces loyal to Gaddafi from the oil town of Ras Lanuf on Friday.
Doctors said at least 26 people had died in Friday's fighting around Ras Lanuf and what rebels said was an attack by Gaddafi's forces on an arms store on the edge of the eastern town of Benghazi, where the uprising began in mid-February.
Rebel fighters said they had taken the town of Bin Jawad some 525 km east of Tripoli and were moving on toward Sirte, Gaddafi's heavily guarded home town 160 km (100 miles) away.
The fight over Sirte is likely to be fierce. The town is psychologically important. It is not only where Gaddafi was born but a place he has fashioned into a second capital designed in his own extravagant image.
"If Benghazi (rebels) can expand down into the Gulf of Sirte ... they've got a very good shot at independence at the least -- or maybe even overturning him at the most," said Peter Zeihan, analyst with the U.S.-based Stratfor think tank.
In Bin Jawad, rebels played the pre-Gaddafi monarchist national anthem over a loudspeaker. Government fighter jets and a helicopter circled overhead but did not open fire, although the rebels fired at the helicopter with anti-aircraft guns.
The latest fighting suggested front lines between government forces, including militia and mercenaries, and the rebels, who are fighting with everything from captured tanks to sticks and winning support from some police and soldiers along the way, were far from clear and could shift quickly.
Dissident soldiers manned a rebel checkpoint at the entrance to Ras Lanuf and said it was safely in rebel hands.
A day earlier, flashes and thuds had resounded from fighting around the town, 660 km east of Tripoli. Helicopters had strafed positions of rebels, who fired rifles back.
On Saturday the offices of the Harouge Oil Operations, a key oil terminal in the North African OPEC member, were abandoned and rebels commandeered vehicles.
"Gaddafi stole from the people and now the people are taking it back," said one armed looter, Nasr al-Abdili, who was taking a pick-up truck.
The streets were calm, with people queuing for bread. "I am very pleased, we all are. We are finished with Gaddafi," said Saleh Mohamed, 37, who works as an administrator in an oil firm.
The revolt is the bloodiest yet against long-entrenched rulers in the Middle East and North Africa. Brega and Ajdabiyah, eastern coastal oil terminals in rebel hands, have both been fired on from the air in the past few days.
The International Energy Agency said the revolt had blocked about 60 percent of Libya's 1.6 million bpd (barrels per day) oil output. The loss, due largely to the flight of thousands of foreign oil workers, will batter the economy.
Libyan crude exports were set to slide in the coming days. "You now have a situation where everything is pointing toward a more or less complete shutdown of Libyan production," said Samuel Ciszuk, a senior analyst with IHS Energy.
U.S. crude prices rose to their highest levels since September 2008, and Brent crude futures for April delivery closed at $115.97 a barrel on Friday, up $1.18.
Western leaders have urged Gaddafi to go and are considering various options including the imposition of a no-fly zone, but are wary about involving their militaries after wars in Afghanistan and Iraq that were deeply unpopular at home.
Britain said on Saturday it was hoping to send a diplomatic taskforce to Libya soon to make contact with opposition leaders and had readied a battalion of troops to aid humanitarian and evacuation efforts if needed.
Mustafa Gheriani, a spokesman for the rebel February 17th coalition, told Reuters in Benghazi the international community seemed to be waiting to see who would get the upper hand.
"It's about who can hold his breath under the water longest and I think it will be us," he said.
(Additional reporting by Michael Georgy in Tripoli and Alexander Dziadosz in Ajdabiya, writing by Philippa Fletcher; editing by Mark Trevelyan)