A Libyan government spokesman on Friday denied reports that Muammar Gaddafi's youngest son, brigade commander Khamis Gaddafi, had been killed in a Nato air strike.
"It's false news. They invented the news about Mr Khamis Gaddafi in Zlitan to cover up their killing," Moussa Ibrahim told Reuters in Tripoli. "This is a dirty trick to cover up their crime in Zlitan and the killing of the al-Marabit family (a Libyan family)."
Earlier, a Libyan rebel spokesman said his forces have unconfirmed reports that Moammar Kadhafi's youngest son has been killed in a Nato air strike on Friday on the western town of Zlitan.
The spokesman, Mohammad Al Rajali, said that according to the rebel reports, Khamis Kadhafi was among 33 government troops killed in a Nato strike early on Friday on a government operations center in Zlitan.
Officials in the Libyan capital Tripoli could not be reached for comment.
Nato said there has been bombing around Zlitan on Thursday but a spokesman in Brussels could not verify the report.
Khamis is a major commander in his father's military forces and his death would be a blow to government efforts to crush the rebels.
The 27-year-old Khamis has been in charge of Libya's 32nd Brigade, which has been fighting the rebels in Zlitan, 90 miles (140 kilometers) southeast of Tripoli.
In April, the Libyan government reported that Kadhafi's son Seif Al Arab was killed, along with three of Kadhafi's grandchildren in a Nato airstrike against his house in the Tripoli neighborhood of Ghargour.
Kadhafi camp seeks Islamist allies
Muammar Kadhafi's son has made a bid to divide the fractious Libyan rebellion, telling a newspaper he was forging an alliance with Islamist rebels against their liberal allies.
Saif Al Islam Kadhafi's comments, in an interview with the New York Times, were a sign that the Libyan leader's camp hopes to exploit divisions among the rebels revealed by the assassination of their military commander last week.
The newspaper quoted an Islamist rebel leader who confirmed contact with Kadhafi's son. However, he pledged continued support for the opposition and denied a split with the liberal wing of the six-month-old rebellion.
The rebels scored a victory on Thursday, bringing a ship with a seized cargo of government-owned fuel into their port.
The docking of the Cartagena, a tanker carrying at least 30,000 tonnes of gasoline -- a scarce commodity in government territory -- boosted an insurgency which has broad international military and diplomatic backing but is struggling to oust Kadhafi in his 41st year as leader of the 60-year-old state.
Kadhafi has so far remained in control of the capital Tripoli despite severe fuel shortages and rebel advances on three fronts, backed since March by Western air strikes.
He has defied hopes in Western states of a swift exit, forcing them to await progress on political and military fronts.
The rebels face their own problems, from stalling battlefield momentum to internal splits, exposed starkly last week when military chief Abdel Fattah Younes was killed in circumstances that have yet to be fully explained.
Rebels and pro-Kadhafi forces have exchanged fire in the towns of Zlitan and Brega to the east of Tripoli, and a rebel offensive in the Western Mountains appeared to have stalled.
But a report from south of Tripoli suggested the revolt was spreading. According to a local resident of Msalata, 110 km (70 miles) from the capital, three Libyans were killed on Wednesday in a town until now unscathed by civil war violence.
It began with a clash between people waiting in a queue outside a bakery, then escalated with the burning of a local government office. Police called in army troops to help them regain control and three unidentified locals died, he said.
Kadhafi cracked down firmly on Islamists during his years in undisputed power, and many Islamists have joined the rebellion, siding with more liberal, pro-Western rebels trying to oust him.
In what would amount to a remarkable policy reversal, Saif Al Islam Kadhafi told the New York Times he had made contact with Islamists among the rebels, led by a figure named Ali Sallabi, and would now form an alliance with them.
The Islamists and the government would issue a joint statement on their alliance within days, he said.
"The liberals will escape or be killed," said Saif Al Islam, once seen as a reformist and potential successor to his father. The newspaper described him sporting a newly-grown beard and traditional scarf rather than his customary Western dress.
"Libya will look like Saudi Arabia, like Iran. So what?" he said. "I know they are terrorists. They are bloody. They are not nice. But you have to accept them," he added.
However, the Islamist figure courted by Saif Al Islam denied there was any such deal. Sallabi confirmed contact with Saif Al Islam, but said he still backed the rebellion.
Libyan Deputy Foreign Minister Khaled Kaim said Saif Al Islam Kadhafi was speaking for himself, not for the government, in his comments regarding Islamists.
"I think Saif Al Islam, he was explaining himself not explaining the position of the government," Kaim told reporters in Tripoli.
Nato, which is enforcing an arms embargo on Libya, gave the rebels a boost on Thursday when it cleared the Cartagena, a tanker carrying enough fuel to fill nearly a million cars, to dock in Benghazi.
A Nato spokesman declined to comment on a report in a petroleum industry newsletter, the Petroleum Economist, that the Cartagena was seized on Tuesday night by anti-Kadhafi rebels with the help of special forces from a European state.
Kaim condemned the seizure of the tanker Cartagena, which belongs to the Libyan government's shipping arm, a move he said violated international law. He said said British and French special forces had helped rebels seize the boat.
Fighting has slowed since breakneck advances and retreats over Libya's desert terrain in the uprising's early days.
Near the capital, rebels control a mountainous region southwest of Tripoli, as well as the port of Misrata to the capital's southeast. In the mostly rebel-held east of the country, fighting has see-sawed between the town of Ajdabiyah and the oil port of Brega.
Hospital officials in Ajdabiyah said one rebel was killed and four others were wounded in clashes in Brega on Wednesday. Rebels said the front line was quiet on Thursday as they cleared mines set by government forces before further attacks.
Britain's Ministry of Defence said it had carried out air strikes on Tuesday and Wednesday against buildings, staging posts and a tank being used by Kadhafi forces near Zlitan, the next big town on the road from Misrata to Tripoli .
On Thursday, on the western side of Zlitan, pro-Kadhafi officials showed journalists the bodies of two children they said had been killed in a Nato air strike earlier in the day.
There were no signs of military infrastructure. It was impossible for journalists to confirm the official account.
"We did hit a military target at around 6.30 this morning and it was a command-and-control site," said an official at Nato operational HQ in Naples. "We always take seriously allegations of civilian casualties and are looking into it, but we have no evidence at this stage that this was caused by an air strike."
A rebel spokesman in Zlitan named Mohammed said Nato hit a location in the town used by Khamis Al Kadhafi "but we don't know if he was there at the time and whether he was killed".
"Today we heard a lot of fighting inside Zlitan. We heard light and heavy weapons. We know the revolutionaries were not involved. So it seems the fighting was internal --- Kadhafi forces fighting against each another," he said.
In the west, where rebels hope to capture Tiji, Kadhafi's last major stronghold in plains at the foot of the Western Mountains, a rebel advance has halted for want of ammunition.
A Reuters reporter said Kadhafi's forces fired about seven rounds of heavy artillery from Tiji at rebel positions on Thursday but the rebels did not return fire.