WRAPUP 2-Libya rebels say they hold gains south of capital
* Rebels say in firm control of town 80 km from Tripoli
* They deny government claim it has re-taken the town
* Heavy NATO air strikes overnight in capital
* Power blackouts worsening in Tripoli
(Updates with British military statement)
By Michael Georgy
NALUT, Libya, Aug 7 (Reuters) - Libyan rebels said on Sunday they were firmly in control of the town of Bir al-Ghanam, a staging post about 80 km (50 miles) south of Tripoli, rejecting a government assertion they had been pushed back.
A small settlement in the desert, Bir al-Ghanam is also the closest point the rebels have come to Muammar Gaddafi's stronghold in the capital, lending it a strategic role in the rebels' six-month campaign to end Gaddafi's rule.
Rebel commanders in the region said on Saturday they had seized control of Bir al-Ghanam in an offensive in which four anti-Gaddafi fighters had died.
Taking the town -- which lies on a highway leading north to the Mediterranean coast and on to Tripoli -- would break weeks of stalemate during which rebels have been unable to make big advances despite NATO air strikes on government forces.
Libyan Prime Minister Al-Baghdadi Ali Al-Mahmoudi said on Sunday that rebels, under NATO air cover, had seized Bir al-Ghanam temporarily but they had been driven out by local volunteers and Libyan forces.
"This is exactly what happened in Bir al-Ghanam, which is back in the hands of the honorable and brave local tribes ... and under the legitimate control of the government of Libya," he told a news conference in Tripoli.
But a local commander rejected that version of events.
"Gaddafi is a liar because Bir al-Ghanam is under our control," Colonel Juma Ibrahim, a rebel commander from the nearby town of Zintan, told Reuters.
"We are still in the same position we were yesterday."
He said in the past 24 hours rebel forces had, in fact, pushed about 10 km (6 miles) northeast of Bir al-Ghanam, and were now planning to push towards the coastal town of Zawiyah.
Zawiyah, which lies 50 km (30 miles) west of Tripoli, has been the scene of two uprisings which were smashed by Gaddafi's security forces. A large contingent of the rebels fighting around Bir al-Ghanam are from Zawiyah.
It was not immediately possible to verify independently who was in control of Bir al-Ghanam.
Most analysts say Gaddafi will eventually be forced to relinquish power if NATO states and their rebel allies maintain the pressure on him by starving him of weapons, fuel and cash and attacking his forces.
However, some alliance members are unsettled by how long the Libyan campaign is dragging on and how much it is costing, especially at a time of economic uncertainty. If NATO wavers, this could give Gaddafi an opportunity to hold on to power.
For now though, there is no sign of a let-up in the air campaign, led by French and British warplanes. A Reuters reporter in Tripoli said there were multiple strikes overnight in the southeast of the city.
After the initial explosions, there were smaller blasts on the ground and flames shooting into the air, suggesting the target contained highly flammable material.
Britain said on Saturday -- while rebels were attacking Bir al-Ghanam -- its aircraft had been in the area and attacked two ammunitions stores, a military headquarters and a position supporting government rocket launchers.
In a separate operation on Sunday, British Apache attack helicopters took off from a warship in the Mediterranean Sea and fired Hellfire missiles at military vehicles in Al-Watyah, the site of a government air base 170 km south-west of Tripoli, spokesman Major General Nick Pope said in a statement.
Potentially adding to pressure on Gaddafi, Tripoli has been experiencing power shortages in the past few days and these have been growing worse.
Libyan state television appealed on Sunday to people to conserve energy by switching off air conditioners in mosques and offices when they are not in use.
Because of the blackouts, many residents have no air conditioning during the peak summer heat and no refrigeration as they prepare for evening meals during the Muslim holy month of Ramadan.
Some areas of the Libyan capital are getting as little as four hours of power a day, residents said this week.
Mohamed Abu Ajeela Rashid, a former Libyan health minister who is now a senior hospital doctor, said power was cut while he was performing surgery. He said he had to complete the operation by the light of his cell phone.
Libyan government officials have said the problems will be fixed within the next few days. They blame NATO for attacking electricity lines, but an official with the alliance denied there had been any such strikes.
In eastern Libya, where rebels and pro-Gaddafi forces are fighting along another front, rebel commanders said they were making a big push to capture the coastal oil town of Brega, about 780 km from Tripoli.
But they said progress was slow because Gaddafi's forces had laid minefields around the town. "We don't want to lose anybody so we're moving slowly but surely," said rebel spokesman Mohammad Zawawi.
Pope Benedict, giving his Sunday blessing from the papal summer residence of Castel Gandolfo near Rome, appealed for an end to violence in the Middle East.
"My thoughts also go to Libya, where the use of arms has not resolved the situation," he said.
"I urge the international organisations and those with political and military responsibilities to relaunch the search for a peace plan for the country with conviction and determination, through talks and constructive dialogue." (Additional reporting by Missy Ryan in Tripoli, Hamid Ould Ahmed and Christian Lowe in Algiers, Robert Birsel in Benghazi, Libya, Michael Holden in London and Deepa Babington in Rome; Writing by Christian Lowe; Editing by Sophie Hares)
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