Libyan rebel forces came under heavy fire Sunday as troops loyal to leader Moammar Gadhafi shelled the outskirts of the key eastern town of Ajdabiya, the latest in a series of back-and-forth battles that have marked the area for several weeks.

Government forces advanced on the strategically important city, forcing rebels and civilians to retreat north, through a thick sandstorm, toward the rebel stronghold in Benghazi.

Others fired back with rockets and no government forces entered the city, said rebel fighter Awad Sathi.

Seventeen people died in the fighting, according to an NGO worker and an opposition activist.

The city has seen intense fighting in recent weeks. Gadhafi forces laid siege to Ajdabiya last month with tanks, armored personnel carriers and heavy artillery, but were pushed back by NATO airstrikes that cleared the way for the rebels to head west.

But even with the airstrikes, the rebels have struggled against Gadhafi's better trained and equipped troops, and have been unable to reach Sirte, the Libyan leader's hometown and the gateway to government-held territory.

Gadhafi's forces, under the threat of further NATO aitrsikes, have been unable to advance on Benghazi.

In Paris, French Defence Minister Gerard Longuet dismissed statements from a top NATO official that the alliance is short of aircraft. Longuet said instead that NATO's mission in Libya is hampered by a lack of ground information.

The Libyan government has come under sharp international criticism for its assault on Misrata and has been accused by human rights groups of using land mines and heavy weapons such as artillery shells, missiles and cluster bombs. Such bombs can cause indiscriminate casualties and have been banned by many countries.

In Tripoli, Libyan government spokesman Moussa Ibrahim denied the allegations, telling a small gathering of foreign diplomats: "Don't believe the lies."

"Don't believe that the Libyan army attacks civilians," Ibrahim said.

"We would never bombard our cities or our people. It is against our morals and our religion. The Libyan army are the Libyan tribes and they would never kill their own sons and daughters or bombard Zawiya, Zuwara, Benghazi or Misrata," he said, referring to cities where battles have or are being fought.

With files from Associated Press