Last updated at 03:42 GMT
Coalition air raids have hit the town of Sirte, Col Muammar Gaddafi's hometown and the next target of rebel forces advancing westwards.
A Libyan government spokesman said three Libyan civilians had been killed in the city's port.
Heavy explosions were also heard in the capital, Tripoli, late on Sunday.
The raids came as Nato took full command of the whole military operation in Libya, intended to enforce a UN resolution to protect civilians.
Foreign correspondents in Sirte said they heard several loud explosions in the city as aircraft flew overhead.
A rebel spokesman in Benghazi has said Sirte is now in the hands of rebel forces - but there has been no independent confirmation of the claim.
Libyan officials say more than a week of strikes have killed nearly 100 civilians but this cannot be independently confirmed.
The air strikes, intended to prevent Col Gaddafi's forces from attacking civilian targets among the uprising against his rule, have allowed rebel forces to push westwards along the coastal highway from their eastern stronghold of Benghazi.
In the last two days a number of coastal communities and important oil installations, including Ras Lanuf, Brega, Uqayla and Bin Jawad, have fallen to the rebels since they took control of Ajdabiya.
Sirte lies about halfway along the coast between Tripoli and and Benghazi. Journalists in the city on Sunday said it was swarming with soldiers.
"We want to go to Sirte today," rebel fighter Marjai Agouri told Reuters news agency.
"I don't know if it will happen," he said outside Bin Jawad with about 100 other rebels armed with rocket launchers, anti-aircraft guns and pickup trucks mounted with machine guns.
'Terrorist gangs'
On Sunday, Nato's Secretary General, Anders Fogh Rasmussen, said the bloc was taking charge of the whole military operation in Libya "with immediate effect".
Mr Rasmussen said Nato's goal was to "protect civilians and civilian-populated areas under threat of attack from the Gaddafi regime".
"Nato will implement all aspects of the UN Resolution. Nothing more, nothing less," he added.
"We are already enforcing the arms embargo and the no-fly zone, and with today's decision we are going beyond. We will be acting in close co-ordination with our international and regional partners to protect the people of Libya."
The BBC's Chris Morris in Brussels says the mission to protect civilians was more sensitive because it involved debate about what exactly were legitimate military targets on the ground.
There were disagreements notably between France and Turkey about political control of the mission, but they have now been resolved, our correspondent says.
Nato Secretary General Anders Fogh Rasmussen says the decision is a "significant step"
But the precise rules of engagement have not been revealed, he adds.
Alongside the Nato command structure will be a separate, high-level committee of representatives of all countries taking part in the military action, including Arab states. It will give what one official called "broad political guidance."
Meanwhile, the battle for Misrata, the last significant rebel-held city in western Libya, has continued.
On Sunday evening, a resident told the BBC that eight people had been killed and 26 wounded - five of them critically - as Col Gaddafi's forces advanced on the al-Jazeera residential area in the west of the city.
Libyan state TV earlier said Misrata was "secure" and life was "going back to normal". Security forces had arrested "terrorist gangs", it said.
A Libyan government spokesman said three Libyan civilians had been killed in the city's port.
Heavy explosions were also heard in the capital, Tripoli, late on Sunday.
The raids came as Nato took full command of the whole military operation in Libya, intended to enforce a UN resolution to protect civilians.
Foreign correspondents in Sirte said they heard several loud explosions in the city as aircraft flew overhead.
A rebel spokesman in Benghazi has said Sirte is now in the hands of rebel forces - but there has been no independent confirmation of the claim.
Libyan officials say more than a week of strikes have killed nearly 100 civilians but this cannot be independently confirmed.
The air strikes, intended to prevent Col Gaddafi's forces from attacking civilian targets among the uprising against his rule, have allowed rebel forces to push westwards along the coastal highway from their eastern stronghold of Benghazi.
In the last two days a number of coastal communities and important oil installations, including Ras Lanuf, Brega, Uqayla and Bin Jawad, have fallen to the rebels since they took control of Ajdabiya.
Sirte lies about halfway along the coast between Tripoli and and Benghazi. Journalists in the city on Sunday said it was swarming with soldiers.
"We want to go to Sirte today," rebel fighter Marjai Agouri told Reuters news agency.
"I don't know if it will happen," he said outside Bin Jawad with about 100 other rebels armed with rocket launchers, anti-aircraft guns and pickup trucks mounted with machine guns.
'Terrorist gangs'
On Sunday, Nato's Secretary General, Anders Fogh Rasmussen, said the bloc was taking charge of the whole military operation in Libya "with immediate effect".
Mr Rasmussen said Nato's goal was to "protect civilians and civilian-populated areas under threat of attack from the Gaddafi regime".
"Nato will implement all aspects of the UN Resolution. Nothing more, nothing less," he added.
"We are already enforcing the arms embargo and the no-fly zone, and with today's decision we are going beyond. We will be acting in close co-ordination with our international and regional partners to protect the people of Libya."
The BBC's Chris Morris in Brussels says the mission to protect civilians was more sensitive because it involved debate about what exactly were legitimate military targets on the ground.
There were disagreements notably between France and Turkey about political control of the mission, but they have now been resolved, our correspondent says.
Nato Secretary General Anders Fogh Rasmussen says the decision is a "significant step"
But the precise rules of engagement have not been revealed, he adds.
Alongside the Nato command structure will be a separate, high-level committee of representatives of all countries taking part in the military action, including Arab states. It will give what one official called "broad political guidance."
Meanwhile, the battle for Misrata, the last significant rebel-held city in western Libya, has continued.
On Sunday evening, a resident told the BBC that eight people had been killed and 26 wounded - five of them critically - as Col Gaddafi's forces advanced on the al-Jazeera residential area in the west of the city.
Libyan state TV earlier said Misrata was "secure" and life was "going back to normal". Security forces had arrested "terrorist gangs", it said.
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