Heavy fighting broke out Monday in the Libyan town of Bani Walid, as supporters of ousted leader Moammar Gadhafi attempted to capture the city, killing at least four fighters loyal to the country's new government.

Residents said both sides fought with rocket-propelled grenades and anti-tank weapons. The clashes are said to have begun when Gadhafi loyalists angry about the arrest of some of their men attacked revolutionary fighters in the town.

Libyan media quoted Bani Walid's local council spokesman, Mahmoud al-Warfali, as saying pro-Gadhafi units took control of most of Bani Walid and that the green flag, the banner of the former government, could be seen flying in the streets.

Senior Libyan officials confirmed reports of battles in the city, 140 kilometers southeast of the capital, Tripoli, but they said the fighting may have resulted from “internal problems.” A revolutionary commander said dozens of reinforcements were sent to Bani Walid to help secure the town.

The outbreak of violence prompted pro-government militias in Tripoli, Misrata and Benghazi to declare a high alert and to secure entrance points to those cities.

Bani Walid – base of the powerful Warfallah tribe – was one of the last towns in Libya to surrender to last year's anti-Gadhafi revolt. Many people there oppose the country's new leadership.

Local tribal elders eventually agreed to let National Transitional Council fighters enter the town, but relations even after the war have been uneasy. In November, about 15 NTC soldiers were killed in an ambush by Gadhafi loyalists just outside the city.

Libya's new rulers are struggling to unify a deeply fractured country after eight months of civil war and more than 40 years of Gadhafi's authoritarian rule.

On Sunday, deputy NTC head Abdel Hafiz Ghoga stepped down, one day after anti-government protesters stormed the ruling body's offices in Benghazi.

Ghoga, one of the Council's highest-profile members, announced his resignation as thousands of university students demonstrated against him in Benghazi, where last week he was manhandled and had to be pulled to safety. The protesters denounced Ghoga's presence in the NTC, calling him and other former loyalists “opportunists.” Ghoga was a belated defector to the Libyan rebels from the Gadhafi government.

Benghazi residents also have accused the NTC of corruption, not moving fast enough on reform, and favoring former loyalists at the expense of wounded rebels who helped overthrow Gadhafi last year.