(new lead, grafs 1-2)

Heavy gunfire has erupted in the Libyan capital, Tripoli, in a neighborhood that had been a center of support for loyalists to former leader Moammar Gadhafi.

News reports on Friday said clashes broke out between provisional government supporters and Gadhafi loyalists who staged a rally in Tripoli.

Meanwhile, provisional government fighters are regrouping in a final attempt to gain control of Mr. Gadhafi's hometown of Sirte, one of the few remaining strongholds for his supporters.

The National Transitional Council fighters said Friday that pro-Gadhafi forces are cornered in an area of about two square kilometers. On Thursday, NTC fighters had to retreat in one part of the coastal town after encountering heavy artillery fire from Mr. Gadhafi's well-armed supporters.

Earlier in the week, NTC fighters made significant advances in Sirte. They seizing the town's police headquarters, gained control of the main hospital and the convention center that Gadhafi loyalists had used as their main base of operation.

NTC officials have said the capture of Sirte will allow them to declare the country liberated, because it will mean the provisional government controls all of Libya's ports and harbors.

Sirte is 360 kilometers east of Libya's capital, Tripoli, and has served as a center of support for Mr. Gadhafi. Provisional government forces have been trying to take the town for three weeks.