TRIPOLI — Rebels overran Moamer Kadhafi's compound in Tripoli Tuesday, raising their flag and ripping the head off his statue, but said they had found no sign of the strongman or his sons.

The streets of Tripoli erupted into celebratory gunfire when news spread that the insurgents had breached the walls of Bab al-Azizya compound in the centre of the capital and had sent Kadhafi's forces fleeing.

As rebel leaders proclaimed they had "won the battle," fighters inside the compound celebrated by firing automatic weapons into the air, chanting "Allahu Akbar" (God is greatest) and raiding the armoury for ammunition, pistols and rifles.

But Kadhafi loyalists still held out in parts of the city, and were in control of the Rixos Hotel, headquarters of the foreign journalists accredited to the regime, preventing any of them from leaving.

In the rebels' eastern bastion of Benghazi, where residents too poured onto the streets in celebration, military spokesman Colonel Ahmed Omar Bani said there had been no trace of Kadhafi or his family in the compound.

"Bab al-Azizya is fully under our control now. Colonel Kadhafi and his sons were not there; there is nobody," Bani said. "No one knows where they are."

"We have won the battle," Abdel Hakim Belhaj, the insurgents' Tripoli commander told Al-Jazeera television from inside the complex at the end of the massive assault that began in the morning.

"The military battle is over now," he said.

An AFP correspondent said rebels first breached the surrounding cement walls before pouring inside.

"They have taken Bab al-Azizya. Completely. It is finished. It is an incredible sight," he said, adding that the bodies of a number of apparent Kadhafi fighters were lying inside, as were wounded people.

Footage from satellite channels showed rebel fighters ripping the head off a statue of the dictator, stepping on it and kicking it.

One young man, a green bandana around his head, then picked it up and held it above his head like a trophy, flashing a huge smile.

As other rebels tore up a poster portrait of Kadhafi, one climbed atop a huge sculpture of a fist gripping an airplane -- a symbol of a US attack on the compound in 1986 -- trying to break off a piece.

Another rebel proudly brandished a seized rifle with a gold-plated barrel and stock saying "Kadhafi people killed us with it."

The fighting for Kadhafi's headquarters was the most intense in the city since rebel fighters in their hundreds came surging into the capital three days ago.

The sky in the afternoon was filled with the sound of heavy and light machine guns as well as mortars, with the overhead roar of NATO jets, though it was unclear if they carried out air strikes.

Even two kilometres (about a mile) from the fighting, the almost constant whistle of falling bullets from the celebratory gunfire could be hear from the rooftops, as the city's mosques chanted "Allahu Akbar."

On the eastern front, Libyan rebels Tuesday overran the eastern oil hub of Ras Lanuf on the road to Kadhafi's hometown of Sirte, spokesman Bani said.

Bani said he hoped insurgents would soon reach Bin Jawad, a hamlet just east of Sirte and almost halfway between the rebel-held cities of Benghazi and Misrata.

Bab al-Azizya had been the site chosen in the early hours of Tuesday by Kadhafi's son, Seif al-Islam, to make an appearance before journalists to refute reports that he had been arrested by the rebels.

"Tripoli is under our control. Everyone should rest assured. All is well in Tripoli," Seif said at the compound, smiling broadly and flashing the V-for-victory sign.

"I am here to refute the lies," the 39-year-old said about reports of his arrest, and accused the West of waging a "technological and media war to cause chaos and terror in Libya."

Seif, like his father, is wanted by the International Criminal Court (ICC) for crimes against humanity. He said Kadhafi and his entire family were still in Tripoli, denying rumours he had fled but without specifying the exact location.

His comments were backed up by the Russian head of world chess, Kirsan Ilyumzhinov, who said on Tuesday Kadhafi had told him in a telephone call that he was in Tripoli and would remain there.

"I am alive and healthy. I am in Tripoli and do not intend to leave Libya. Do not believe the lying reports by Western television companies," Ilyumzhinov quoted Kadhafi as saying, the Interfax news agency reported.

In Paris, French President Nicolas Sarkozy said he had agreed with his US counterpart Barack Obama to continue military action against Kadhafi under the March UN mandate until he lays down his weapons.

British Foreign Secretary William Hague said Kadhafi's regime was in its "death throes," while his Italian counterpart Franco Frattini predicted the strongman and his sons would soon be captured.

The International Crisis Group think-tank warned that Libya "faces a pivotal moment of historic proportions."

"Steps taken in the next few days and weeks will decisively shape the post-Kadhafi order," it said.

In Doha, senior rebel official Mahmud Jibril said Libya's transition "begins immediately" and that Qatar would host a meeting on Wednesday to organise $2.4 billion in aid for the country.

The number two in the National Transitional Council told a press conference, "we will build a new Libya, with all Libyans as brothers for a united, civil and democratic nation.

"This is the new Libya where every Libyan works as a beloved brother, hand in hand, to serve the interests of the nation to ensure equality and justice for everyone.

"We have to be transparent in front of the whole world. Now we have to concentrate on building and healing our wounds."

Speaking to the young people of Libya "who brought us our dignity back," he said: "I would like to confirm to them that this is your revolution and you will have to continue the march to finish the revolution ... to participate in the creation and establishment of the Libyan state in order to move Libya forward."

Jibril praised "our revolutionaries, who have written a page in history .... They allowed Tripoli to be liberated, and for that help they are in our hearts."

Earlier on Tuesday, the United States said it is seeking to release up to $1.5 billion in frozen Libyan assets in order to help the rebels establish a secure government and meet humanitarian needs.