Tripoli: The Libyan rebels' interim government announced it is moving from the country's second city to the capital Tripoli, another step toward taking control, as heavy fighting raged around Muammar Gaddafi's last stronghold early Friday.

Before daybreak, rebels exchanged heavy fire with fighters loyal to Gaddafi who have holed up in residential buildings in the Tripoli neighbourhood of Abu Salim, a regime stronghold.

Smoke rose from the area of Abu Salim, and heavy machine gun fire and loud booms were heard across Tripoli before dawn.

Gaddafi on the run

Gaddafi is still on the run, but a minister in the rebel government said his capture is not a prerequisite for setting up a new administration in the capital.

"We can start rebuilding our country," Finance Minister Ali Tarhouni of the National Transitional Council told a news conference late Thursday.

"He (Gaddafi) is the one who is basically in the sewer, moving from one sewer to another."

Even with his regime in tatters, Gaddafi has tried to rally his followers to kill the rebels who waged war for six months to bring down Libya's ruler of 42 years.

"Don't leave Tripoli for the rats. Fight them, and kill them," Gaddafi said in a new audio message broadcast on Al Ouroba TV, a Syria-based satellite station.

Since sweeping into Tripoli on Sunday, the revolutionaries have been struggling to take complete control. On Tuesday, they took Gaddafi's sprawling government compound, Bab Al Aziziya, and have also been battling for control of the nearby neighbourhood of Abu Salim.

Bullet-ridden corpses

The fight for Abu Salim has been particularly bloody. Bullet-riddled corpses from both sides sprawled on the ground.

Despite the chaos, members of the National Transitional Council announced they are moving the rebels' interim government from the eastern city of Benghazi, which fell to rebel forces early in the conflict, to Tripoli.

"In the name of the martyrs ... I proclaim the beginning ... of the work of the executive office in a free Tripoli as of this moment," Tarhouni told reporters.

"I have a final message for everyone who is still carrying arms against the revolution," he said, "to let go of their arms and go back to their homes, and we promise not to take revenge against them."