Talks with Gaddafi's loyalists at the besieged Libyan town of Bani Walid broke down on Sunday, chief negotiator of the National Transitional Council (NTC) Abdallah Kanshil told a press conference.

NTC fighters secure a new check point on the road between Tarhuna to Bani Walid, southeast of Tripoli, on September 4, 2011, as fighters loyal to Libya's new rulers advanced on one of Moamer Kadhafi's last remaining bastions. [Xinhua]

"As chief negotiator, I have nothing to offer right now. From my side, negotiations are finished," Kanshil said.  No comments from Gaddafi forces were available.

NTC commander Mohamed Al Fassi earlier said negotiations had stalled. "Those people are not serious," he said.

Kanshil said he thought that two of Gaddafi's sons and his spokesman Moussa Ibrahim were in Bani Walid.

On Saturday the rebels issued an ultimatum to Bani Walid inhabitants requiring them to raise the white flag 10:00 a.m. (0800 GMT) on Sunday or they would launch an all-out attack. 

Civilians who fled the city reported that a number of pro-Gaddafi loyalists had left the city for surrounding mountains, taking heavy weaponry with them.

They described the town as "a ghost town" with closed shops, and without petrol or gas.

On Saturday, Chairman of the NTC Mustafa Abdel Jalil issued a deadline which demanded pro-Gaddafi forces still holding out in the towns of Sirte, Bani Walid, Al Juffra and Sebha to lay down their arms before Sept. 10.