The Gadhafi regime said on Sunday it was in contact with members of the rebel National Transitional Council as the rebels tried to quash rumors about the mysterious death of their army chief.

In Tripoli, deputy foreign minister Khaled Kaaim said Libyan leader Moamer Gadhafi’s government was in contact with members of the rebel NTC, but denied rumors of contacts with General Abdel Fatah Yunis, who was killed on Thursday.

Libyan rebels were on Saturday probing the death of their army chief General Abdel Fatah Yunis, a murder the Gadhafi regime blamed on al-Qaida, as NATO warplanes targeted the strongman's "terror broadcasts."

"The NTC has appointed an investigative committee and we will publish all the facts of this investigation," said Ali Tarhuni, who handles economic affairs for the rebel National Transitional Council.

General Abdel Fatah Younes, commander of forces fighting to oust Moammar Gadhafi and once the Libyan strongman's right-hand man, has been killed, sparking fears of a violent backlash.

Younes was shot dead by an armed gang after he was summoned from the front by the rebel National Transitional Council "for questioning over military issues," NTC chairman Mustafa Abdel Jalil said late Thursday.

Libyan rebels seized the town of al-Ghazaya near the Tunisian border Thursday as part of a pre-Ramadan offensive aimed at unseating strongman Moammar Gadhafi.

The heaviest fighting was on the eastern side of the town, some 12 kilometers from the border with Tunisia, in a two-pronged attack that also came from the west and began around 8:00 am (0600 GMT).

Libya's rebel National Transitional Council has nominated Mahmoud Nacua as its ambassador to London, a council official said Thursday after Britain recognized the group as the country's sole government.

"The NTC has appointed an ambassador to take over all current affairs. The ambassador is Mahmoud Nacua," Guma al-Gamaty, the UK coordinator for the NTC, told reporters in London.

Countries rocked by the Arab Spring uprisings face "turbulent and difficult" times, Britain's foreign secretary warned Thursday, hours after expelling diplomats loyal to Moammar Gadhafi from Britain.

William Hague said the movements could be derailed by faltering economies, sectarian feuds and counter-revolutions, predicting "a lot of problems and even convulsions" for years to come, in an interview with The Times.

Libyan leader Moammar Gadhafi on Wednesday said he was ready for "sacrifice" to defeat NATO and the rebels who are trying to unseat him, in an audio message to his loyalists.

"We are not afraid. We will defeat them," the Libyan strongman said of the NATO alliance and the insurgents.

Britain on Wednesday recognized Libya's rebel council as the country's sole legitimate government, after dramatically expelling all remaining staff loyal to Moammar Gadhafi from the London embassy.

Foreign Secretary William Hague said he had invited the National Transitional Council (NTC) to take over the embassy and appoint an official envoy to London in a major boost for the rebel movement fighting Gadhafi's regime.

Parties to Libya's crisis remain deeply divided on how to end the conflict that has raged since an uprising against the regime erupted in February, U.N. special envoy Abdul Ilah al-Khatib said.

Khatib this week visited the rebel capital Benghazi in Libya's east as well as the capital Tripoli, where veteran strongman Moammar Gadhafi has his headquarters.

Civil war or not, every year the holy Muslim month of Ramadan must be respected and in Libya's rebel stronghold of Benghazi women bakers are working overtime to meet demand.

Dozens of women knead dough into shape, making sweets and salty pies, at the iconic Al-Harabi bakery, undaunted by the unrelenting war, sweltering temperatures, power-cuts and tight budgets.