An AFP correspondent on the scene said rebels from the Berber-dominated Nafusa mountain range began a two-pronged assault from Bir Ayad at 8:00am (0600 GMT).
By early afternoon, commanders on one flank said that they were in control of Bir Ghanam, just 80 kilometres (50 miles) from Tripoli, and that the worst of the battle was over.
In parallel, hundreds of fighters forked off towards the sea, getting within 20 kilometres of Surman -- which lies on the coastal road to the west of Tripoli -- before encountering any resistance.
Their path northward was veiled in black smoke and strewn with burned-out Libyan army vehicles, some with the bodies of soldiers inside, an AFP journalist witnessed.
But forces loyal to embattled Libyan leader Moamer Kadhafi fought back, laying down fire in a bid to halt the rebel's advance, and the rebels themselves then responded in kind.
Many rebels were from the "Tripoli Battalion," a group of volunteers from the capital and other coastal towns who were eager to liberate their homes in the five-month-long revolution.
Elsewhere in Libya the rebels suffered setbacks, however.
Residents of a small town 100 kilometres east of the capital, who took up arms against the regime, were said to be under siege.
A representative from Al-Qusbat's rebel military committee told AFP the town was surrounded by Kadhafi loyalists and that fears were growing of a bloodbath.
"All roads going to Al-Qusbat are blocked by Kadhafi's forces. They cut electricity and communications since yesterday," Khamis Nuri el-Kasseh said from the rebel capital Benghazi after contacting the town by satellite phone.
"Kadhafi's forces are not yet in control of the town, but we expect it will be bloody today," he said.
Al-Qusbat is cut off from other rebel towns in western Libya, with 70 kilometres (45 miles) separating it from the nearest positions at Zliten to the east.
Meanwhile in Benghazi, Libya's rebel chief pleaded for unity after a high-profile murder within the ranks, as the insurgents said they captured a town south of Tripoli and NATO pummelled a key oil town.
Mustafa Abdel Jalil, who heads the de facto government of east Libya, issued the plea for unity following the July 28 assassination of General Abdel Fatah Yunis, a long-time Kadhafi ally before his defection.
"I would like to send a message to all Libyans in the liberated areas: we need to focus all our resources on the battle for freedom," he said in a statement urging rebels to keep battling to end Kadhafi's 41-year rule.
"We need to unite now for a bigger cause," he said.
Last month's murder of Yunis as he returned to Benghazi under arrest presented Abdel Jalil's lawyer-dominated National Transitional Council with a formidable political challenge.
The NTC has come under fire for its role in events leading up to the killing and its handling of the aftermath.
Although details are still under investigation, it is known that an arrest warrant was signed by senior NTC member Ali Essawy, raising allegations that the NTC unknowingly helped facilitate his murder.
The council has faced angry and sometimes violent protests from Yunis's tribe, as well as demands for reform from groups that were at the forefront of the February 17 revolution.
Abdel Jalil insisted a criminal investigation was under way and would yield prompt results.
"Soon the investigation will reveal the offender and the details of the incident," he said, and also promised that an internal investigation into the NTC's handling of the crisis would not flinch from apportioning blame.
"No one is above the law, starting from the top of the NTC," Abdel Jalil said.
Since Yunis's death, his Obeidi tribesmen have exerted pressure for speedy justice and even retribution in a country where clans for decades formed the basis for solving disputes in the absence of functioning judicial institutions.
Abdel Jalil spoke a day after NATO warplanes blasted the area around the eastern oil hub of Brega.
Of 43 strike missions carried out by NATO on Friday, the alliance reported 38 hits on loyalist targets around the town. Among the targets reportedly hit were two tanks and 20 other armoured vehicles.
Meanwhile, the rebel government said it has flown nearly $10 million in cash to the Nafusa mountains.
Around 14 million Libyan dinars was "to be distributed directly to families throughout the Nafusa mountains during the holy month of Ramadan," the NTC said in a statement.
"It's the first step of our plan to kick-start the economy and bring back stability to the region," said NTC economic adviser Mazen Ramadan.