Nato bombs destroyed Libyan leader Muammar Gaddafi's office in his immense Tripoli residence on Monday, while rebels pushed forward against the strongman's troops in the besieged city of Misrata.

Heavy explosions had shaken the centre of Tripoli shortly after midnight as warplanes overflew the Libyan capital.

A Libyan official accompanying journalists at Gaddafi's compound said 45 people were wounded, 15 seriously, in the bombing. He added that he did not know whether there were victims under the rubble.

"It was an attempt to assassinate Colonel Gaddafi," he affirmed.

Seif Al-Islam, Gaddafi's son, described the bombing as "cowardly."

"This cowardly attack on Muammar Gaddafi's office may frighten or terrorise children but we will not abandon the battle and we are not afraid," he said, claiming that Nato's battle was "lost in advance."

Nato warplanes had already late on Friday targeted the Bab Al-Aziziya district, where the presidential compound is located.

At around 3.00 am (0100 GMT) smoke was still rising from part of the building that was hit, watched by dozens of people shouting slogans praising the Guide.

A meeting room facing Gaddafi's office was badly damaged by the blast.

In Misrata, 215 kilometres (132 miles) East of Tripoli, Libyan rebels made significant gains on Sunday in a key street in the besieged city, where residents have lived under a rain of shells and sniper fire for 50 days.

"I spent 50 days home with my family hiding from sniper fire," said Muftah Emeitiq, 45, adding that he was happy to be finally free thanks to the rebel advance.

Misrata was still rocked by a salvo of Grad rockets and bursts of automatic weapons on Sunday, despite a pledge by the Libyan regime to halt its fire in the port city where the humanitarian situation has stirred international concern.

But rebel gains on Tripoli street — one of the main arteries of the city and the stronghold of troops loyal to Gaddafi until on Friday — allowed residents to venture out after days stuck at home.

Rebels had killed or captured the majority of snipers behind deadly assaults and ambushes on the street but still encountered some pushback from regime forces.

A barrage of artillery fire continued into the night, killing at least 10 people including children, witnesses and medics said on Monday.

However, the sounds of fighting died away early morning and the streets were quiet and deserted after sunrise.

Rebel leader Taher Bashaga said: "It will take some time, I think, but then it will all go well and Misrata will be free for ever, God willing."

Two captured pro-Gaddafi soldiers told AFP that loyalist forces were losing their grip in the battle for Misrata.

"Many soldiers want to surrender but they are afraid of being executed" by the rebels, said Lili Mohammed, a Mauritanian hired by Gaddafi's regime to fight insurgents in Libya's third city.

Deputy foreign minister Khaled Kaim said the army had suspended operations against rebels in Misrata, but not left the city, to enable local tribes to settle the battle "peacefully and not militarily."

But Colonel Omar Bani, military spokesman of the rebels' Transitional National Council (TNC), said Gaddafi was "playing a really dirty game" aimed at dividing his opponents.

"It is a trick, they didn't go," Bani said in the eastern rebel stronghold of Benghazi. "They have stayed a bit out of Tripoli Street but they are preparing themselves to attack again."

The city suffered its heaviest toll in 65 days of fighting on Saturday, with 28 dead and 100 wounded compared to a daily average of 11 killed, according to an Doctor Khalid Abu Falra at Misrata's "overwhelmed" main private clinic.

Gaddafi's regime is accusing the United States, which launched its first Predator drone strikes over the weekend, of "new crimes against humanity" for deploying the low-flying, unmanned aircraft.

Drone strikes have so far targeted a rocket launcher targeting Misrata and an SA-8 surface-to-air missile in Tripoli, according to Nato officials.

In eastern Libya, a lull in the fighting has given families some respite in their search for loved ones who have gone missing in and around the strategic crossroads city of Ajdabiya.

"As things calm down, people are building up the courage to come out and report," said Najim Miftah, a volunteer who has a binder of missing people that has doubled in two days with more than 70 new records.

Massive protests in February — inspired by the revolts that toppled long-time autocrats in Egypt and Tunisia — escalated into war when Gaddafi's troops fired on demonstrators and protesters seized several eastern towns.