The invading forces initially took control of the major facilities of the town but opposition forces from nearby Benghazi City, (opposition stronghold) came to help with their firepower as they engaged the pro-Gadhaffi forces in fierce gun battle.
The attack began just after dawn, when several hundred pro-Gadhafi forces in 50 trucks and SUVs mounted with machine guns descended on the port, driving out a small opposition contingent and seizing control of the oil facilities, port and airstrip. But by afternoon, they had lost it all and had retreated to a university campus 5 miles (7 kilometers) away, Yahoo News
There, opposition fighters besieged them, clambering from the beach up a hill to the campus as mortars and heavy machine gun fire blasted around them, according to an Associated Press reporter at the scene. They took cover behind grassy dunes, firing back with assault rifles, machine guns and grenade launchers. At one point, a warplane struck in the dunes to try to disperse them, but it caused no casualties and the siege continued, the report added.
Gadhaffi remains defiant despite losing key cities and towns to the opposition. In his televised statement Wednesday, Gadhaffi warned the US and European allies on their plans to enter Libya to help the opposition.
"We will enter a bloody war and thousands and thousands of Libyans will die if the United States enters or NATO enters," Gaddafi told Tripoli supporters at a gathering televised live.
"We are ready to hand out weapons to a million, or 2 million or 3 million, and another Vietnam will begin. It doesn't matter to us. We no longer care about anything."
Meanwhile, a "no-fly zone" is being proposed by some sectors including former Libyan diplomats in the US. The interim opposition leadership in Benghazi has called for air strikes but discouraged presence of foreign military forces in the country.
"We call for specific attacks on strongholds of these mercenaries," said council spokesman Hafiz Ghoga.
"The presence of any foreign forces on Libyan soil is strongly opposed. There is a big difference between this and strategic air strikes."
U.S. Defence Secretary Robert Gates said
: "Our job is to give the president the broadest possible decision space." But he said that enforcing a no-fly zone meant first attacking and destroying Libyan air defences.
"A no-fly zone begins with an attack on Libya to destroy the air defences...Then you can fly planes around the country and not worry about our guys being shot down," Gates told a congressional hearing.
The Libyan turmoil as caused a massive evacuation of foreign workers who are in Libya, filling up the borders in Tunisia and Egypt with numbers estimated at close to 200,000 people. The borders have become a chaotic scene with thousands of refugees arriving everyday.