Forces loyal to embattled Libyan leader Muammar Gaddafi recaptured the key oil centre of Ras Lanuf, Al-Jazeera TV reported Wednesday.
Rebels fled from Ras Lanuf amid heavy tank and artillery fire, it added.
Aided by Western military strikes, the rebels had managed to seize a number of oil-rich towns in restive Libya, including Ras Lanuf and Brega in recent days.
The world's major powers, the United States, Britain and France, started on March 19 to launch strikes from the air and sea against Gaddafi's forces after the U.N. Security Council passed a resolution to impose a no-fly zone over Libya.