SIRTE, Libya - Libyan transitional government forces said on Sunday they had captured the university and a conference centre in Muammar Gadhafi's hometown of Sirte, but were holding off an assault on the main square to let civilians escape.

Taking Sirte would bring Libya's new rulers a big step closer to establishing control of the whole country almost two months after they seized the capital Tripoli, but Gadhafi snipers are holding up their advance in chaotic street battles.

"We have made good progress," said Mahmoud Bayu, commander of the Shohada Al-Manatair brigade, to the south of Sirte.

"We have entered the Ouagadougou centre, there is some fighting going on, but it's under our control."

He said the National Transitional Council forces had also reached the main square of the Mediterranean coastal city, but could not move in yet as they were waiting for civilians to leave the area.

Another landmark target for the new advance on Sirte, the university, had also been seized overnight, NTC forces in the east of the city said, but they had come under heavy fire there on Sunday morning and some had fallen back.

"Last night, we were sleeping in the university and this morning we came under random strikes there," said a fighter who had withdrawn from the position. "We have martyears inside and we are trying to get them out."

Two bodies lay in a nearby field hospital, one with his face blown off. They had been hit by fire from an anti-aircraft gun while trying to evacuate patients from a frontline hospital, their comrades said.

Lines of pick-up trucks mounted with heavy weaponry waited to move up to take on a sniper who was holding up their advance.

The faltering struggle to capture Sirte and the other few remaining bastions of pro-Gadhafi loyalists has sidetracked NTC efforts to set up effective government over the sprawling North African country and rebuild oil production vital to its economy.

Sirte holds symbolic importance because Gadhafi turned it from a fishing village into a second capital. He built opulent villas, hotels and conference halls to house the international summits he liked to stage there.

But taking Sirte carries risks for Libya's new rulers. A drawn-out battle with many civilian casualties will breed hostility that will make it very difficult for the NTC to unite the country once the fighting is over.

Thousands of civilians have fled Sirte as fighting has intensified, describing increasingly desperate conditions for those still inside the seafront city.

There is no electricity while drinking water and food are running out, and people have spoken of the stench of rotting corpses at the city's hospital.