WADI DINAR, Libya — New fighting flared in a hilltop town in Libya on Tuesday between fighters defending Bani Walid, a stronghold of slain dictator Moammar Gadhafi's regime and pro-government militias trying to win control.

A military spokesman, Gen. Ali al-Shekhili, said there is still some resistance, but the pro-government forces have made significant advances toward the center of the town. Large numbers of residents have fled over the past few days, he said.

The violence in Bani Walid coincided with celebrations of the anniversary of the declaration of liberation of Libya from Gadhafi's dictatorship after an eight-month civil war.

A year later, Libya is still fractured by rival militias, tribes and armed backers of the old regime, and the government is struggling to impose its authority.

In Tripoli, people celebrated in the capital's main square, where families and late night revelers lingered, waving national flags, and some occasionally set off fireworks.

"For people my age, we think things are moving forward. We are optimistic," said Essam Bakr, 22, as he took part in the festivities. "The problem is not the government. It is 42 years of backwardness."

On the other side of town, Mahmoud Sherif, 19, was more solemn. He said the fighting in Bani Walid cast a shadow on what should have been a celebration. On a large wall near Gadhafi's former Tripoli compound, Bab al-Aziziya, Sherif and others were busy painting murals.

Sherif's read: Peace.

"Things are 50-50. The country is still not at peace," he said. "We are in a difficult place because there is fighting in Bani Walid. It is very bad. It should be resolved peacefully."

The Libyan government's move to take control of Bani Walid, some 140 kilometers (90 miles) southeast of Tripoli, came in the aftermath of the kidnapping, torturing and killing last month of an anti-Gadhafi fighter by Bani Walid forces.

The country's newly elected National General Council issued a decree to arrest the men behind the killing. Efforts for a peaceful resolution through negotiations with the town's elders failed.

There was a brief lull in the fighting on Monday.

But on Tuesday, snipers took over tall buildings in the center of Bani Walid, firing at pro-government militias on the town's outskirts.

An Associated Press reporter at the outskirts of the town saw doctors and nurses fleeing. A Bangladeshi doctor, who refused to give his name for fear of retribution, said that the main hospital was not functioning, with no electricity and no medical supplies. Foreign workers were seen walking 20 kilometers (12 miles) to escape the gunfire.

As night fell, commander Muftah Abu-Lefa of Libya Shield, a militia under Defense Ministry control, told the AP that his forces reached the hospital, and clashes had ceased for the time being.

Farid Moammar, another Libya Shield commander, accused fighters of Bani Walid of using residents as human shields and hostages to prevent the pro-government militias from advancing into the town.

___

Associated Press writer Paul Schemm contributed to this report from Tripoli, Libya.

Also on HuffPost:

Loading Slideshow...
  • A Libyan woman denounces the ongoing siege on Bani Walid alleging that it is harming civilians. (AP Photo/Paul Schemm)

  • Demonstrators shout their defiance after militiamen acting as police fire in the air in an attempt to disperse their protest in front of Libya's parliament. (AP Photo/Paul Schemm)

  • Protesters shout their defiance at Libyan security forces after they fired in the air to disperse a protest in front of the nation's parliament. (AP Photo/Paul Schemm)

  • Libyan militiamen acting as police detain a protester in front of the fence surrounding Tripoli's parliament Sunday, Oct. 21, 2012. (AP Photo/Paul Schemm)

  • Militiamen duck for cover after one of them fired his heavy machine gun into the air to disperse a demonstration in front of Libya's parliament Sunday, Oct. 21, 2012. (AP/Paul Schemm)

  • A Libyan militiaman fires his heavy machinegun in the air to disperse a demonstration in front of Libya's parliament Sunday Oct. 21, 2012. (AP Photo/Paul Schemm)