BENGHAZI, Libya: As Libyan rebels fought to close in on Tripoli on Thursday, their chief said he feared a bloodbath in a battle for the capital that could come by the end of August.

Anticipating victory, the rebels' political leaders have set out a plan to transform the country from autocracy to a fully blown democracy, in a roadmap which could help define Libya for the coming decades.

National Transitional Council (NTC) head Mustafa Abdel Jalil said in a newspaper interview the "noose is tightening" and that he feared a "veritable bloodbath" in Tripoli because of strongman Moammar Gadhafi's refusal to step down.

"Gadhafi will not go quietly; he will go amid a catastrophe that will touch him and his family," Abdel Jalil told the pan-Arab newspaper Asharq Al-Awsat from his eastern bastion of Benghazi.

The Libyan leader, who has ruled the oil-rich North African nation for nearly 42 years, has consistently refused to step down, and continues to rally his supporters to drive back the enemy.

Yet Abdel Jalil said he hoped to celebrate in Tripoli – a city of more one million inhabitants – the feast of Eid al-Fitr, which will cap the Muslim fasting month of Ramadan at the end of August.

He renewed the rebels' rejection of any talks which do not envision the departure of Gadhafi and his sons from power, and criticised U.N. envoy Abdel Ilah Khatib for not taking that into account.

"Khatib only proposes initiatives that do not include this demand," which he said was fundamental.

After what he called the massacre of the six-month-long war to unseat Gadhafi, Abdel Jalil said "Libyans will not negotiate anything before achieving the departure of Gadhafi and his sons."

NTC member Wahid Bourchan, meanwhile, said Wednesday that "discussions" did take place this week in Tunisia, but that they were with regime technocrats hoping to gain political asylum in Europe, especially in France.

Rebel leaders have denied reports of negotiations earlier this week between Libyan rebels and regime representatives in Tunisia.

Rebels are fighting to sever Tripoli's supply lines from Tunisia to the west and to Gadhafi's hometown of Sirte in the east.

The operations to cut off the capital aim to to prompt defections and spark an uprising inside Tripoli.

In a possible sign that Tripoli is starting to feel the pinch, power cuts have become more frequent and mobile telephone networks are suffering increased disruptions, an AFP correspondent in the city said.

In the town of Zawiyah to the west, rebels claimed they were in control of "most" of the strategically vital port and had gained control of the oil refinery by late Wednesday.

Colonel Ahmed Omar Bani said that further west rebels were pushing toward the Tunisian border, an apparent bid to further strangle what limited supply lines remain for Gadhafi's regime.

"Zabrata and Sorman are now entirely under our control," he said referring to two towns west of Zawiyah, adding there was now fierce fighting on an inland road parallel to the main coastal route around the town of Ajaylat.

Field commander Mohammed Khalifa was more cautious, saying "freedom fighters" now controlled "most of the city except for the eastern part," from which snipers and mortar fire harried the rebels.

Rebel spokesman Abdulsalam Othman said insurgents had also "liberated" the key garrison town of Garyan, less than 50 kilometers south of Tripoli.

East of Tripoli, rebels moved toward a town that links the capital and Sirte -- Gadhafi's hometown and a stronghold for his military.

In other developments, insurgent fighters claimed to have captured the town of Murzuq, a key communications hub in the desert region of Sabha province, 500 kilometres south of the capital.

Mohammed Wardugu, speaking in Benghazi, said that after an hour of heavy fighting on Wednesday, "we took control of Murzuq and its military garrison."

A dozen Gadhafi troops and one rebel were killed and five officers captured, with one rebel fatality, Wardugu said, adding that heavy weapons and ammunition were seized.

Looking to a post-Gadhafi era, the NTC drew up a 14-page "constitutional declaration" in Benghazi.

Obtained by AFP on Wednesday, it plots a path via the first elections seen in Libya since 1964 to a new constitution and a multi-party democracy inspired by Islamic law.

"Libya is a democratic and independent state," the document states. "The people are the source of authority, Tripoli is the capital, Islam is the religion and Islamic sharia is the principal source of legislation."

It sets out key milestones along a roughly two-year path to democracy including an assembly election, a constitutional referendum and a general election.

Richard Dalton, a former British ambassador to Tripoli and Tehran, said the document was a good start.

"It is important, not only to anchor different groups within the NTC to something, but also to convince the international community about the NTC, which has been questioned after the (Abdel) Fatah Yunis murder."

Rebel military chief General Yunis, a former interior minister and Gadhafi regime linchpin, was assassinated July 28 after being recalled from the front for questioning. His death remains shrouded in mystery.