Libyan troops captured by rebels in Misrata said on Saturday the army had been ordered to retreat from the besieged port, marking a possible shift in a two-month revolt against leader Muammar Gaddafi.
The Libyan government said NATO air strikes might force Gaddafi's army to stop fighting in Misrata, Libya's third largest city, and let local tribes take over the battle.
"We have been told to withdraw. We were told to withdraw yesterday," one army soldier, Khaled Dorman, told Reuters.
Lying in the back of a pickup truck, he was among 12 wounded soldiers brought to a hospital for treatment in Misrata. Blasts and machine gun fire were heard in the distance.
Another serviceman, asked by a Reuters correspondent if the government had lost control over Misrata, said "yes."
The last large city held by rebels in western Libya, Misrata has been under siege for nearly two months. Hundreds of civilians have died in the fighting.
"The situation in Misrata will be eased, will be dealt with by the tribes around Misrata and the rest of Misrata's people and not by the Libyan army," Deputy Foreign Minister Khaled Kaim told reporters in Tripoli.
"You will see how they will be swift and quick and fast and the Libyan army will be out of this situation in Misrata, because the Libyan people around Misrata cannot sustain it like this," he said.
"The tactic of the Libyan army is to have a surgical solution, but it doesn't work, with the air strikes it doesn't work."
Hours after the announcement of a shift in tactics in Misrata by Gaddafi forces, NATO bombs struck what appeared to be a bunker near his compound in central Tripoli. The government said the target was a car park and three people were killed.
Western countries have vowed not to stop bombing Libya until Gaddafi leaves power, but their air war now in its second month has failed to tip the balance.
In Misrata, captured government soldiers said the army had come under attack from rebels during its retreat.
"The rebels attacked us while we were withdrawing from Misrata near a bridge this morning," said Ayad Muhammad, a young soldier. As he spoke, other uniformed soldiers in the hospital moaned in pain, some saying "My god, my god."
Earlier, rebels in Misrata seized control of a downtown office building that had been a base for Gaddafi's snipers and other troops after a furious two-week battle.
Shattered masonry, wrecked tanks and the incinerated corpse of a government soldier lay near the former insurance offices on Friday. "They shot anything that moved," one fighter said of the Gaddafi men driven out.
BOMB HITS TRIPOLI
NATO jets hit a target near Gaddafi's compound in central Tripoli early on Saturday. Government spokesman Mussa Ibrahim said three people were killed by the "very powerful explosion" in a car park near Gaddafi's Bab al-Aziziyah compound.
Reuters reporters said the area was surrounded by a wall and guarded by watchtowers and soldiers. They saw two large holes in the ground where the bombs had torn through soil and reinforced concrete, to pierce what appeared to be an underground bunker.
Smoke was rising from one of the craters and ammunition crates lay nearby. Ibrahim said the area was disused and the ammunition boxes were empty.
On Friday, U.S. Senator John McCain became the highest-profile Western politician to visit Libya's rebel-held areas. He expressed impatience with Washington's cautious use of military power and said the United States should deploy ground attack aircraft and recognize the rebel government.
The visit by McCain, the senior Republican politician who ran against Barack Obama for the presidency in 2008, raises the political stakes over a war that the top U.S. military officer acknowledged was headed toward stalemate.
Since the initial days of the strikes, Obama has ordered his troops to take on a backseat military role, reluctant to become embroiled in a third war in a Muslim country and leaving ground strikes to Washington's NATO allies.
This week, U.S. forces said they would send drones to carry out ground strikes. In the rebels' eastern stronghold of Benghazi, McCain said Washington should use low-flying attack planes, among the most feared tactical weapons in its arsenal.
"It is still incredibly puzzling to me that the two most accurate close air support weapons systems, the A-10 and the AC-130, have been taken out of the fight," he said on Friday.
Admiral Mike Mullen, chairman of the U.S. military's joint chiefs of staff, told U.S. troops in Baghdad that Western-led air strikes had degraded between 30 and 40 percent of Gaddafi's ground forces. Referring to the conflict, he said: "It's certainly moving toward a stalemate.
McCain said Washington should recognize the rebels' Transitional National Council as the official government of Libya, a step already taken by France.
"They have earned this right and Gaddafi has forfeited it by waging war on his own people," he said.
White House spokesman Jay Carney, asked about McCain's appeal, replied: "We think it's for the people of Libya to decide who the head of their country is, not for the United States to do that."
Sources close to French President Nicolas Sarkozy said he planned to visit Benghazi, probably in the first two weeks of May, and that he wanted British Prime Minister David Cameron to accompany him.
More Libyan soldiers say army retreating from Misrata