An SAS unit is being 'held' by rebel forces in Libya, it has been reported.

Up to eight soldiers were captured as they escorted a junior British diplomat through rebel-held territory in the east of the country, the UK Sunday Times said.

Spokesmen for both the Ministry of Defence and the Foreign Office would neither confirm nor deny the report.

According to the newspaper, the SAS soldiers were taken by rebels to Benghazi, the largest city held by the opposition, where they were detained. It is said the diplomat had intended to contact Colonel Muammar Gaddafi's opponents ahead of a visit by a senior colleague to establish diplomatic relations with the rebels.

But the SAS intervention is thought to have angered Libyan opposition figures.

The claims came to light as the battle for control of the country continued to rage. Early this morning, frequent bursts of gunfire could be heard in the capital Tripoli, but it was not immediately clear who was firing.

Fierce fighting was under way in the city of Zawiya, just 50 miles from the capital Tripoli, as rebels struggled to repel an assault by Gaddafi forces. Meanwhile, insurgents were reported to have taken control of the oil port of Ras Lanuf after a series of bloody engagements, a key strategic site.

Yesterday's assault on Zawiya, a city of some 200,000 people, reportedly began with a dawn attack by pro-Gaddafi forces firing mortar shells and machine guns. Witnesses said the shelling damaged government buildings and homes. The fighting sparked several fires, sending a cloud of heavy black smoke over the city. According to a doctor in the city, 12 people died in hospital and at least 60 others were injured.

Initially, the rebels retreated to deeper positions, before launching a counter offensive in which they reportedly regained some of the lost territory. By mid afternoon, the rebels had reoccupied central Martyrs' Square while the pro-regime forces were believed to have regrouped on the city's fringes, sealing off access routes.

The anti-Gaddafi rebels were said to have fared better in Ras Lanuf last night, where they seized control after forcing pro-regime troops to flee. The port could act as an important staging post for an assault on Tripoli.