Troops loyal to Libyan leader Muammar Gaddafi broke through opposition defences and entered Az Zawiyah city near the country's capital on Saturday.
The military offensive was launched on Friday night, using artillery and tanks, Al Jazeera reported on its website. Other media said heavy fighting was still raging.
The government lost control of Az Zawiyah, some 60 km to the west of Tripoli, in late February. The city was viewed as a platform for an attack on Tripoli to oust long-time ruler Gaddafi. Al Jazeera cited witnesses to say that at least 30 people were killed in the latest fighting but added that the number was climbing steeply as both sides continued fighting for the city.
According to Al Arabiya television, over 15 armoured vehicles and one tank had entered the city with a population of some 300,000 people. Inspired by the ouster of long-time rulers of Tunisia and Egypt, opponents of Gaddafi are demanding an end to his 42-year rule. The widespread anti-Gaddafi protests that broke out last month have reportedly claimed scores of lives, with one estimate putting the number at about 2,000.