ZAWIYAH, Libya - Libyan rebels hoisted their flag in the center of this town near the capital on Sunday after the most dramatic advance in months cut off Muammar Gadhafi's capital from its main link to the outside world.

The swift rebel advance on the town of Zawiyah, about 50 kilometers west of Tripoli, will deal a psychological blow to Gadhafi's supporters and also cuts the coastal highway to Tunisia which keeps the capital supplied with food and fuel.

But there was no sign Tripoli was under immediate threat from a rebel attack: Heavily-armed pro-Gadhafi forces still lie between Zawiyah and the capital.

Rebels from the Western Mountains region south of this Mediterranean coast town dashed forward into Zawiyah late on Saturday, encountering little sustained resistance from pro-Gadhafi forces.

Near Zawiyah's central produce market early on Sunday, about 50 rebel fighters were milling around and triumphantly shouting "Allahu Akbar!" or "God is greatest." The red, black and green rebel flag was flying from a shop.

Rebel fighters said there were still forces loyal to Gadhafi in the town, including snipers. Artillery and machine gun fire could still be heard.

Rebels said the capital was their next target once Zawiyah was fully under their control. One rebel fighter smiled as he pointed to a road sign marking the highway from Zawiyah to Tripoli.

"I'm 1,000 percent sure we're going to take over Zawiyah today and then move on to Tripoli," said Bin Jaffin Ali, 34, a shopkeeper turned rebel fighter.

Border clashes

Further west along the coastal highway, near the main border crossing into Tunisia, local residents said late on Saturday there were heavy clashes between rebels and government troops but that Gadhafi's forces still controlled the crossing.

In Tripoli, government officials on Saturday denied Zawiyah was under rebel control, saying a small force of anti-Gadhafi fighters had launched a "suicide mission" that was quickly repelled.

Zawiyah is "absolutely under our control", government spokesman Moussa Ibrahim told reporters. "A very small group of rebels tried to move into the south of Zawiyah but were stopped easily because of our armed forces," he said.

Reuters