Rebels in Libya have been celebrating after fighting off an attempt by troops loyal to Col Muammar Gaddafi to retake the eastern oil port of Brega.

The town was full of jubilant people, who fired their guns in the air, the BBC's John Simpson in Brega reports.

Well-armed Gaddafi forces had arrived in large numbers, and at one stage appeared to hold the upper hand. But they were later forced to retreat.

Meanwhile, Col Gaddafi warned he would "fight until the last man and woman".

In a televised speech, Col Gaddafi also said that thousands of Libyans would die if Western forces intervened.

Discussions continue at the UN about the idea of implementing a no-fly to stop pro-Gaddafi forces launching air attacks on rebel forces.

But the BBC's Barbara Plett in New York says Russia, among others, is unlikely to support any no-fly zone proposal unless there are air raids by Colonel Gaddafi's forces on civilians.

Meanwhile, Venezuela's President Hugo Chavez has spoken to Colonel Gaddafi to discuss the establishment of a "peace commission" to mediate in the country.

Communications Minister Andres Izarra did not say how the Libyan leader had reacted to President Chavez's proposal.
'Important reverse'

The BBC's John Simpson said that he had been to Brega's seashore and university, where the heaviest fighting took place on Wednesday, and they appeared entirely clear of pro-Gaddafi troops.

Our correspondent says that a senior rebel officer suggested the Gaddafi troops - who had arrived in more than 100 vehicles and had managed to briefly seize the university and an oil refinery - might have run out of ammunition and been forced to withdraw.

The excited rebels appear to be very proud of what they have achieved, our correspondent says, and the feeling in the town is that Col Gaddafi's men do not necessarily have their hearts in the job.

A Libyan air force plane did recently drop one bomb nearby, he says, but the attempt by Col Gaddafi to move on the eastern rebel-held areas - his first such attack in two weeks - appears for now to have been repulsed and, although this is by no means a final victory, it is an important reverse for the Libyan leader.

Medical sources in Brega told BBC Arabic that 14 people had been killed in the fighting.

Our correspondent says an airforce plane had earlier tried to bomb the vast weapons dump on the outskirt of Ajdabiya 50km (30 miles) from Brega.

He says most people in Ajdabiya probably assumed at that point that Col Gaddafi's forces were on their way and that there was little between them and the rebel capital Benghazi 100 miles away. But volunteers came pouring in from Benghazi and Ajdabiya.