Talks for peaceful surrender of Bani Walid fail as reports say Gaddafi is heading further south.
Libya's National Transitional Council fighters are preparing for an imminent attack on Bani Walid, a stronghold of the deposed Libyan leader Muammar Gaddafi, as efforts for a peaceful resolution to the standoff seem to have failed.
During prolonged negotiations on Tuesday, the NTC tried to convince representatives from Bani Walid, about 150km southeast of the capital Tripoli, that there would be no retributions if the the town surrendered peacefully.
But the representatives, upon returning to the town to deliver the message, were fired at and forced to retreat to NTC territory.
Meanwhile, Gaddafi has probably left Bani Walid and is heading further south with the help of loyalist tribes towards Chad or Niger, a senior NTC military official told Reuters news agency late on Tuesday.
Hisham Buhagiar, who is coordinating efforts to find the former Libyan leader, said reports indicate he may have been in the region of the southern Libyan village of Ghwat, some 950km south of Tripoli and 300km north of the border with Niger, three days ago.
"He's out of Bani Walid I think. The last tracks, he was in the Ghwat area. People saw the cars going in that direction .... We have it from many sources that he's trying to go further south, towards Chad or Niger," Buhagiar said in an interview.
Al Jazeera's Sue Turton, reporting from north of Bani Walid, said the situation seemed bleak and an attack seemed imminent.
"The five Bani Walid representatives went back with the assurances from NTC, but as they approached the city, they were fired upon. They quickly came back to the rebel territory to take shelter for the night," she said.
"We have talked to commanders and people here. They believe two of Gaddafi sons are still in the city, thats why no negotations work here."
Libyan fighters have surrounded the town and given remnants of Gaddafi forces two deadlines to surrender. Both the deadlines have passed.
Thousands of NTC fighters have been camping outside Bani Walid. They have also built a field hospital and deployed 10 volunteer doctors to prepare for the possibility of a fight.
Also on Tuesday, a large convoy of about 250 armoured vehicles carrying Gaddafi loyalists crossed into neighbouring Niger, raising fresh speculations over the toppled Libyan leader's whereabouts.
Gaddafi or his sons were not spotted in the convoy that reportedly carried gold and cash and was escorted by Niger troops.
The convoy included officers from Libya's southern army battalions and pro-Gaddafi Tuareg fighters and is likely to have crossed from Libya into Algeria before entering Niger, sources said.
Niger's minister of internal affairs, Abdou Labo, however, denied that a Libyan convoy had entered his country. But he confirmed that Niger had given asylum to Gaddafi's internal security chief Abdullah Mansoor on humanitarian grounds.
Al Jazeera's James Bays, reporting from Tripoli, said information about the specifics of the convoy were contradictory, but it was certain that a convoy had crossed.
"What is significant is that none of the reports we have heard so far says anything about sighting of Gaddafi and his sons in the convoy."
The US state department in a statement called on Niger to detain the Gaddafi loyalists who have entered the country.
A French military source said he had been told the commander of Libya's southern forces, General Ali Khana, may also be in Niger, not far from the Libyan border.
Burkina Faso, a former recipient of large amounts of Libyan aid, had reportedly offered Gaddafi exile about two weeks ago but has also recognised the National Transititional Council (NTC) as Libya's government.
On Tuesday, however, Burkina Faso's government said it had not received a request for exile from Gaddafi and the ousted leader was not expected in the West African state.
"Gaddafi in not in Burkina Faso and we have not been approached for any exile demand. Burkina (Faso) has not been informed of Gaddafi's arrival. We are not expecting him," Communications Minister Alain Edouard Traore said on state television.
Meanwhile, the NTC said that Khaled Kaim, Gaddafi's deputy foreign minister, has been captured.