Kadhafi was captured at Sirte and was transferred to Benghazi" in the country's east, National Transitional Council (NTC) advisor Abdelkarim Bizama told AFP.

Kadhafi opponents fired shots in the air in the capital Tripoli and Misrata after news of Mutassim's arrest broke.

Born in 1975, Mutassim Kadhafi is a career soldier and doctor who held the title of national security adviser. He had been considered a rival to his brother Seif al-Islam in any bid to succeed their father.

Seif al-Islam is believed to be hiding in Bani Walid, possibly with Moamer Kadhafi who remains at large weeks after opposition forces captured the capital, Tripoli, in late August ending the Libyan strongman's four-decade rule of the north African nation.

Forces of Libya's new regime said earlier Wednesday they were mopping up the last pockets of resistance in Kadhafi's hometown of Sirte, maintaining its fall was imminent.

A day after seizing Sirte's police headquarters, the National Transitional Council (NTC) forces spent the day closing in from the east and west on the last hold-outs of pro-Kadhafi forces.

Hundreds of NTC combatants in pickup trucks fired rockets from the west of the Mediterranean city, aiming to capture the city and declare the liberation of Libya, clearing the way to set a timetable for post-Kadhafi elections.

An AFP correspondent said Sirte's main square and entire waterfront were under NTC control, along with its fortress-like conference centre, university campus and main hospital, all of which the fighters seized on Sunday.

"All our lines are now in place. The area is completely surrounded," said NTC commander Zubayr Bakush.

As night fell, an AFP correspondent said dozens of NTC vehicles, their horns honking and jubilant occupants firing into the air, converged on the main square to celebrate.

They later withdrew to spend the night in more secure parts of the city.

"We will finish them off tomorrow. It's a done deal," said one, confidently.

NTC soldiers had spent the day going from house to house, sometimes taking prisoners. In one house, NTC forces found 15 Kalashnikovs, seven RPGs and a field radio.

A dozen black prisoners, their hands tied behind their backs, were taken from one house and put aboard a pick-up.

An AFP correspondent reported a fierce firefight around a school where Kadhafi loyalists were putting up strong resistance. He saw at least six bodies and said dozens of fighters had been wounded.

NTC forces then withdrew to bombard the building with mortar fire.

The plight of stranded civilians has raised the concern of Human Rights Watch, which called on both sides to minimise harm to them and ensure prisoners are treated humanely.

The NTC forces began their siege of Sirte on September 15 before launching on Friday what they termed a "final assault" that has seen at least 85 of their number killed and hundreds wounded, according to medics.

NATO warplanes overflew Sirte early Wednesday without firing, an AFP correspondent reported, as the alliance said in its latest update that it had struck six vehicles in Bani Walid. Continued...