Libyan forces say they have retaken control of the port in the city of Sirte, after fierce fighting with militants from so-called Islamic State.
Sirte is the most significant IS stronghold outside Iraq and Syria.
Air and missile strikes have hit IS positions this week, officials said. A spokesman said troops were moving closer to the city centre.
The forces, aligned to the UN-backed unity government in Tripoli, began the battle to retake the city last month.
A spokesman, Ahmed Hadia, told the BBC IS forces had weakened, but "not totally broken down".
He said the troops were encircling part of the city.
Clashes centred on the Ougadougou conference centre, which was once a venue for international summits but has now become an IS command centre.
Forces loyal to the government targeted the conference centre with heavy artillery fire, backed by warplanes.
IS fighters responded using sniper fire, machine guns and mortar rounds.
The government said two soldiers were killed and eight were wounded.
The Misrata spokesman told the BBC that troops were finding fewer landmines or booby-trapped cars the deeper they moved into the city.
Mr Hadia said the car bombs they were finding were smaller than the ones they had used before, "which suggests they were hastily set up".
The troops' biggest fear, he added, was the presence of snipers and the possibility that civilians could be trapped in the battle zone.
Sirte was the hometown of ousted ruler Muammar Gadaffi.
The unity government was formed in Tripoli more than two months ago.
The US said the unity government should be allowed to arm itself against IS. Secretary of State John Kerry has said this would be "the only way to generate the cohesion necessary" to defeat the militants.
Analysis, by Rana Jawad, North Africa correspondent, Tunis
Officials in the capital are hoping that a victory in Sirte will narrow the political divide still plaguing the country.
The anti-IS forces fighting in Sirte are largely made up of militia brigades from Libya's third largest city, Misrata.
This operation started last month, initially only by the armed groups there which felt a growing threat when it appeared the extremist group was edging closer to their city.
But they are also allied to the UN-backed government in Tripoli, and are now believed to be jointly-commanded by figures appointed by the government from Libya's traditional army.
Although UK and US special forces are known to have been advising and possibly training forces there in recent months, it is not clear if this latest operation is getting any outside help.