Tripoli/ Washington: Amid a report that Gaddafi’s loyalists had put forward a proposal to end the civil war in the country, forces loyal to the embattled leader fought a fierce battle for control of Libya's key eastern oil town of Brega.

Government forces pounded besieged Misurata, the country's third largest city and the main rebel stronghold in the west, killing at least one person and wounding several others today.

According to media, a doctor in Misurata, 214 kilometres east of the capital Tripoli, said his clinic was overwhelmed.

"We have one killed, three in the operating room now, one with an amputated leg, we have one in ICU (intensive care) because of shell fragments in his chest and we have six wounded with different wounds and they are waiting for an operation but we have only three operating rooms," Al Jazeera quoted Ayman as telling a new channel.

Militarily, the rebellion appears to be locked in a stalemate. Amid relentless air strikes on Gaddafi's soldiers by the international coalition, a see-saw battle ensued between the pro-Gaddafi forces and the rebels for the third straight day in and around the strategic town of Brega, 800 km east of Tripoli.

The rebels claimed that they had regained control over Brega. However, it is unclear who controls the key oil town, which has been the scene of fierce fighting over the past few days when pro-Gaddafi forces returned after being driven out by rebel forces.

The opposition's advance appeared to be slow and uncertain despite two weeks of air strikes targeting the Gaddafi regime by the western military coalition, Al Jazeera channel said.

The Arab channel said the opposition forces have advanced to a walled university campus near the town's western edge. "If you compare where we are today to here we were a few weeks ago, then we are in the exact same position," it said.

Loyalists 'propose end to conflict'

Meanwhile, a newspaper reported that senior players in the Gaddafi regime has put forward a proposal to end the civil war that would include the dictator giving up power for a constitutional democracy under his son Seif el-Islam.

Citing "eminent people" in Tripoli, a diplomat with close ties to the Libyan government said on Sunday that Seif has proposed the resolution to the conflict that would entail Gaddafi quitting to set up a constitutional democracy in the country.

"This is the beginning position of the opposition, and this is the beginning position of the Libyan government," the unnamed diplomat was quoted as saying by the Times. "But the bargaining has yet to commence."

However, the report said neither Gaddafi nor the rebels appear ready to accept such a proposal, the diplomat said.

Gaddafi’s aides looking for exit

The report comes amid mounting speculation of Gaddafi's aides looking for an exit strategy. The embattled leader suffered a major setback last week when his Foreign Minister Moussa Koussa defected.

Top Libyan leader Ali Abdessalam Treki, who had been named country's new envoy to UN, defected to Egypt.

Treki, a former Foreign Minister and ex-President of the UN General Assembly who has worked closely with Gaddafi for decades, last week announced his exit on opposition websites, declaring "it's our right to live in freedom and democracy."

There is growing speculation that some other senior leaders, close to 68-year-old Gaddafi, may also dump him in a bid to end his 41-year-old rule.

A media report said Libyan deputy Foreign Minister Abdelati Laabidi had crossed into Tunisia on Sunday amid speculation that he may be set to abandon the Gaddafi regime.

Ex Libya FM 'a double agent for MI6, CIA'

Meanwhile, a newspaper  quoted sources as saying that Koussa may have been acting as a double agent for MI6 and the CIA for a decade.

Koussa, who was also Libya's head of Intelligence, met former MI6 head Sir John Scarlett in 2001 in London and had agreed that a British agent could operate in Tripoli and pledged to help track down al-Qaeda activity in the region, it quoted sources as saying.

13 killed in NATO airstrike

At least 13 rebels were killed in a "regrettable" NATO air strike near Brega yesterday. NATO said it was ascertaining reports that a coalition warplane hit a rebel position in the midst of heavy fighting with Gaddafi's forces.

Media reports said a rebel convoy on its way to the front line near Brega fired an anti-aircraft gun into the air. Assuming it to have come from Gaddafi's forces, coalition warplane targeted the vehicles.

"We are looking into these reports. We are always concerned by reports of civilian casualties. NATO's mission is to protect civilians and civilian areas from the threat of attack," Oana Lungescu, a spokeswoman for NATO, was quoted as saying.

Mustafa Gheriani, a spokesperson for the opposition's Transitional National Council, said: "We understand that collateral damage may also take place and we do accept it, because we look at the big picture which saving more lives."

"The leadership is working on preventing a re-occurrence."

Even as the US mulls new ways to force Gaddafi to quit, one rebel fighter told Al Jazeera that he and his fighters have received specialized training from American and Egyptian forces.

Though both the US and Egypt have denied the claim, it is clear that the disorganised and untrained fighters would find it impossible to overthrow the Gaddafi regime without some sort of military training.

The Libyan rebels have acknowledged that their ragtag forces were not trained enough to mount a frontal assault on Brega.

Amid relentless pounding of Gaddafi's forces, Sunday marked a deadline for US forces to begin their anticipated withdrawal from the battlefield, Al Jazeera reported.

White House official had earlier said they intended to take a back seat in the coalition efforts. US fighter jets' will not be involved in military operations unless requested by NATO and approved in Washington DC., the report said.

(Agencies)