68-year-old Gaddafi's opponents had reportedly pressed onto the key town of Brega, 80 km to the west, after reclaiming Ajdabiya, amid indications that the tide may be turning against the embattled leader due to the aerial attacks by US-led coalition forces.
Al-Jazeera said that while it appeared that the rebels had taken over the town of Brega, it remained unclear who controlled the nearby oil port.
Earlier, rebels celebrated on the streets of Ajdabiya after driving pro-Gaddafi forces out of the town.
Gaddafi's forces, who had been controlling the ring road that goes around Ajdabiya, have now been cleared from that position, the Arab channel said.
But Libyan government officials claimed that the army had been withdrawn to save residents from more bloodshed.
In Misurata, shelling by Gaddafi's forces stopped last evening when western coalition planes appeared in the sky, a rebel was quoted as saying.
According to the French armed forces, around 20 of their aircraft supported by an AWACS surveillance plane struck targets yesterday, including five Galeb fighter jets and two MI-35 helicopters on the ground outside Misurata.
Gaddafi's aircraft were caught on the ground at Misurata air base preparing to launch attacks in an area of the rebel-held town.
France is one of the coalition countries enforcing a UN no-fly zone aimed at protecting civilians.
British missile strikes also destroyed three armoured vehicles in Misurata and two more in Ajdabiya, the Royal Air Force said in a statement.
Libyan state TV said there were more air strikes overnight at Sabha in central Libya, adding that military and civilian areas had been hit, but there was no independent confirmation. It also spoke of strikes near Gaddafi's power base of Sirte, on the Mediterranean coast east of Tripoli.
In Washington, US President Barack Obama asserted that the forces loyal to Muammar Gaddafi had been pushed back and a "humanitarian catastrophe" averted.
In his weekly radio address yesterday, Obama once again ruled out sending any American ground forces to the North African country and sought to project the campaign in Libya as a completely multilateral mission.
"We're succeeding in our mission. We've taken out Libya's air defences. Gaddafi's forces are no longer advancing across Libya. In places like Benghazi, a city of some 700,000 that Gaddafi threatened to show 'no mercy', his forces have been pushed back," he said on the eighth day of military strikes in Libya.
Obama asserted that the intervention had saved many innocent lives.
In an interview to CBS News, US Defence Secretary Robert Gates said Gaddafi's troops were planting bodies "of the people he's killed" at the sites attacked by coalition forces to apparently create an impression about civilian deaths.
"The truth of the matter is we have trouble coming up with proof of any civilian casualties that we have been responsible for," Gates said, according to excerpts released by CBS News. "We do have a lot of intelligence reporting about Gaddafi taking the bodies of the people he's killed and putting them at the sites where we've attacked."
Bolstered by the air strikes from coalition forces, the rebels were now eyeing Al-Bisher, a town another 30 km west along the road to Gaddafi's hometown of Sirte.
Ahmed Al Misrati, a pro-democracy activist, told Al-Jazeera from Misurata that the town was "besieged from all sides" yesterday.
".. (Misurata) has been under heavy gunfire and heavy bombardment ... by tanks or mortar shells," he was quoted as saying. "This bombardment is indiscriminate and arbitrary, sometimes targeting residential plots and one entire family was killed - the father and his children.
"They (Gaddafi troops) are also stationed in other rooftops, especially the high buildings ... Anybody in the street comes under heavy gunfire and now the situation is exacerbating and is very, very dire," he said.
Fresh coalition air strikes were also reported on the road between Sirte and Ajdabiya, 400km to the east.
Moussa Ibrahim, a Libyan government spokesman, claimed that the coalition air strikes late late last night killed soldiers and civilians.
"We are losing many lives, military and civilians. The air strikes (yesterday) continued for hours and hours non-stop. We believe many civilians were killed including some families who are escaping the air strikes in their cars," Ibrahim was quoted as saying.
"The road between Ajdabiya and Sirte includes many towns," he said, calling for an immediate end to the air strikes and emergency meeting of the UN Security Council.
Many fighters belonging to Gaddafi's forces, including Gen Bilgasim Al-Ganga -- the number three in Libyan army, were also captured by rebels during the fighting in Ajdabiya, reports from the opposition's stronghold of Benghazi said.
"Bilgasim Al-Ganga has a fierce reputation among the opposition who accuse him of committing many atrocities under the Gaddafi regime," Al-Jazeera said.
In Benghazi, it said, the rebels now believed that they had government forces "on the back foot".
The US and its allies were also reportedly considering arming the Libyan rebels.
Libyan officials have claimed that the coalition air strikes that started last week have killed nearly 100 civilians.