Libyan rebels fought a fierce battle with forces loyal to Muammar Gaddafi near the airport at the western city of Misrata on Sunday as NATO planes targeted government ammunition stores on another front in the war.

Hundreds have died in Misrata, which is the scene of weeks of conflict as rebels fighting to end Gaddafi's decades in power attempt to hold off a government siege.

The port city is considered crucial to the rebels' chances of success because it is the last city they hold in the west of the country.

Conflict is escalating in the Western Mountains region where on Sunday NATO targeted ammunition dumps near Zintan, southwest of Tripoli, but elsewhere there is stalemate with rebels holding Benghazi and other towns in the east while the capital and other cities remain firmly in government hands.

NATO said in a statement it carried out 153 sorties on Saturday, including 58 "strike" sorties that aim to identify and hit targets but do not always deploy munitions.

"Fierce fighting is taking place now at the airport and in the air force college area (near the airport). We are still hearing sounds of artillery and rockets," the spokesman, called Abdelsalam, said from Misrata.

"NATO struck an area in the east of Misrata today but we do not have details," he told Reuters.

Gaddafi's forces are concealing tanks and artillery and using 'shoot and scoot' tactics in Misrata, frustrating NATO air efforts to break the weeks-long siege of the city, the rebels and NATO officials say.

Government forces have abandoned the city centre to the rebels but are entrenched in the built-up outskirts, sometimes firing from the open and scuttling for cover between buildings.

On Friday, the government bombarded fuel storage tanks for the city, sparking a huge fire.

REBEL SURRENDER DENIED

Groups of rebels in Misrata surrendered to the government, the state-run Al-Jamahiriya television station said on Sunday in an apparent effort to capitalise on the strike's impact.

It gave no numbers but quoted a military spokesman as saying some of those who surrendered made recorded "confessions" that would be screened later.

The broadcast brought a swift rebuttal from rebels.

"This is a big lie. Nobody did this (surrendered) and nobody will do. We are steadfast and full of challenge. We will fight him (Gaddafi) till the end even with our nails and teeth if we have to," spokesman Ahmed Hassan said.

He acknowledged the fuel tank attack was causing problems.

"The fuel is still burning and huge clouds of smoke are covering Misrata. This is causing breathing difficulties and threatens a major environmental problem in the city," he said by telephone from Misrata.

An Italian ship came to help extinguish the fire but could not dock because the port is closed and rebels were now at a loss to know how to combat the fire, he said. The port has come under heavy shelling from pro-Gaddafi forces.

The shelling has hampered supply efforts for the city and a rebel spokesman said there only was enough food and water for about a month.

"If this deliberate attack on the port area continues without something being done about eliminating that kind of threat, we might come to a really bad situation as far as food supplies, especially water supplies, are concerned," Saddoun El-Misurati said.

El-Misurati also called on NATO to step up strikes on Gaddafi forces outside the city. "We need to see more stepping up of action by NATO, actions that will limit and eliminate targeting of the civilian population, including the port," he told a news conference in Benghazi.

A rebel spokesman, Gemal Salem, told Reuters from Misrata that rebels had taken control of a village called Zareek, about 25 km west of the city, and were now around 10 km from the government-held town of Zlitan.

"The next mission is Zlitan," he said by telephone. The report of the rebel advance could not be independently verified and there was no immediate reaction from officials in Tripoli.

Another flashpoint in the conflict, the Dehiba-Wazin border crossing linking Libya to Tunisia, was quiet on Sunday, a day after Libyan government munitions landed in Tunisian territory close to the town of Dehiba, a Reuters witness said.

Rebels hold the crossing but Gaddafi's forces are in charge of a far bigger one to the north.