Provisional authority officials in Libya say their forces have taken control of most of the southern desert city of Sabha - one of the last strongholds of former leader Moammar Gadhafi.
National Transitional Council officials said Wednesday that anti-Gadhafi fighters are still encountering some resistance, but have largely taken over the city.
However, provisional authority forces still are struggling to oust Gadhafi loyalists from the towns of Bani Walid and Sirte. Witnesses say pro-Gadhafi forces fired on NTC forces outside Sirte Wednesday as NATO warplanes flew overhead.
Medical sources say provisional authority fighters have sustained heavy losses there, and fighting near Gadhafi's hometown Tuesday killed at least three NTC troops.
Even as the battles raged for control of the last Gadhafi strongholds, Libya's interim prime minister said his administration is working to form a new government. Gadhafi has been hunted by NTC troops since Tripoli was taken over in August.
NTC Chairman Mahmoud Jibril told reporters Tuesday in New York the move will come within the next seven to 10 days. He said the NTC is finalizing decisions on the exact number of ministries and whether they would all be located in the capital, Tripoli, or divided between eastern and western Libya.
The NTC was based in the eastern stronghold of Benghazi during most of the country's ongoing civil war.
Libya's new flag flew at the U.N. Tuesday for the first time since Gadhafi's ouster. U.N. chief Ban Ki-moon welcomed the country's new leaders into the international community, saying the Security Council acted to protect the Libyan people from violence.
U.S. President Barack Obama, also in New York for the General Assembly, said his administration will support Libya as its government works to build a "free, democratic and prosperous" future. He said Libya will have a "friend and partner" to assist its citizens as they transition to democracy.
Earlier Tuesday, the 54-member African Union officially recognized the NTC and announced its support in building an inclusive government in Libya. The AU had been reluctant to recognize the provisional authority because some AU nations had close ties to Gadhafi.
Some information for this report was provided by AP, AFP and Reuters.