The battle for the port of Misrata has intensified, underlining its value as a make-or-break city for both the regime of Libyan leader Muammar Gaddafi and the rebels fighting to oust him.

Officials on both sides openly admit to the strategic importance of the port, which serves as a crucial conduit for military and humanitarian aid to the insurgency in Libya's conflict-wracked west.

"This port is too much of a headache for Gaddafi, so he wants to destroy it at whatever cost," Colonel Ahmed Omar Bani, military spokesperson of the Benghazi-based Transitional National Council, said on Wednesday.

An official in the capital told AFP, on condition of anonymity for fear of reprisals, that Misrata was of critical importance to the regime because "simply put: if it fell, the rebels will be at the doors of Tripoli."

If the rebels were to secure Misrata, they would also bypass the need to fight for Gaddafi's hometown of Sirte, halfway between Tripoli and Benghazi and be able to ship in arms and reinforcements under NATO's "indirect protection," he said.

Misrata remains besieged by Gaddafi's troops to the east, south and west, with its only access to the outside world by sea. The airport, which has been badly damaged, is in the hands of regime forces, according to the rebels.

"It is a stalemate with a lot of movement but you still can't say either side has the upper hand... although I trend towards optimism for the rebels," said Abeir Imneina, a political science professor in Benghazi.

"Gaddafi is trying to do everything in his power so that Misrata does not fall," said Imneina adding Libya's third city held the potential to break the stalemate between the rebel-held east and Tripoli.

And the port, about 12 kilometres east of the city, has been a focal point of strikes by loyalist forces since Monday.

Rebels in Misrata said on Tuesday they pushed Gaddafi's troops out after a siege lasting more than seven weeks, but opposition officials in Benghazi were cautious, suspecting Gaddafi was "regrouping" to "come back in new form".

On Wednesday, the insurgents said NATO air strikes overnight enabled them to force Gaddafi troops 40 kilometres back, putting the Grad rockets of the loyalist forces out of range of the port.

A day earlier, regime forces fired several Grad rockets at the port, killing at least three African refugees and forcing an aid ship to stay out to sea.

A rich history

Of Libya's western cities, Gaddafi has historically had the weakest grip on Misrata, a flaw in his system "because it is too close to this power base," opposition TNC spokesperson Jalal al-Gallal said.

The insurgents are also keen to break the east-west stalemate and win complete control of the city 215 kilometres east of Tripoli in order to prevent the de facto partition of Libya.

"Libyans will never let that happen," Gallal told AFP.

A victory in Misrata for Gaddafi - who has shifted his focus from street fighting to shelling the lifeline port - would be a great setback for the insurgents, TNC officials say.

Demonstrations broke out in Misrata on 19 February, only two days after they did in Benghazi, seat of the opposition.

Gaddafi's security forces promptly shot dead dozens of demonstrators, turning the city of half a million against his 41-year regime, according to a professor in the besieged city.

"Suddenly the entire city stood up against him," he said on condition of anonymity fearing the return of loyalists, who made such a hasty withdrawal that it sparked widespread speculation as to what Gaddafi planned next.

Misrata, he told AFP, had a "long history of revolt" as its notorious merchants, under the leadership of Ramadan Swihli, were the first to rise up against the Italians when they landed in Libya in 1911.

In September 1969, when Gaddafi seized power in a bloodless coup, many of his supporters were officers from Misrata.

But this all changed when they began to understand "how mad" a leader he was, launching their own revolution in 1974, the professor said.

"They failed. Since then, he (Gaddafi) hasn't liked people from Misrata."