The United States is preparing to reopen its embassy in the Libyan capital, Tripoli, while NATO says it is extending its operations in the country for another three months.

U.S. Ambassador Gene Cretz has returned to Tripoli where the U.S. plans to raise its flag over its mission on Thursday.

Cretz was based in Tripoli until December 2010. He left the country after WikiLeaks released his assessments of former leader Moammar Gadhafi's personal life in which he described the former leader as “mercurial,” “notoriously erratic” and a “hypochondriac.”

With forces loyal to Mr. Gadhafi still entrenched in his hometown of Sirte and a few other strategic locations, NATO chief Anders Fogh Rasmussen said Wednesday the alliance is determined to continue its mission “for as long as necessary.”

The 90-day extension is the second time NATO has lengthened its campaign in Libya, and comes less than a week before the previous extension was set to end.

Libya's National Transitional Council says its forces control most of the southern desert city of Sabha, but provisional authority forces still are struggling to oust Gadhafi loyalists from the towns of Bani Walid and Sirte.

At Bani Walid, fighting has been chaotic, with different NTC brigades arguing among themselves, fighters from other areas not getting along with local comrades, and talk of traitors sabotaging the assault.

Even as battles raged for control of the last Gadhafi strongholds, Libya's interim prime minister said his administration is working to form a new government. 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 number of ministries and whether they would all be located in the capital, Tripoli, or divided between eastern and western Libya. The Council was based in the eastern stronghold of Benghazi during most of the country's ongoing civil war.