Libya's capital saw its first major fighting in two months as loyalists to former Libyan leader Moammar Gadhafi traded shots with provisional government fighters after a rally in the city.

Friday's violence erupted when about 50 of Mr. Gadhafi's supporters tried to stage a rally in a Tripoli neighborhood where he had strong support.

Officials say at least two Gadhafi supporters and one fighter from the National Transitional Council were killed. Several others were wounded.

The fighting was the first major clash in the capital since NTC fighters took control of the city in August.

Meanwhile, the U.S. State Department says the first 14 contractors of a 50 member team have arrived in Libya to help Libya's National Transitional Council find surface-to-air missiles that went missing during clashes with Mr. Gadhafi's forces. Officials say the weapons pose a security risk.

In another development, provisional government fighters launched a fierce assault on Mr. Gadhafi's hometown Sirte, one of the few remaining strongholds for his supporters.

NTC fighters said Friday that pro-Gadhafi forces are cornered in a two square kilometer area.

Earlier in the week, the fighters made significant advances in Sirte. They seized the town's police headquarters, and gained control of the main hospital and the convention center 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.