Libya's army is pouring reinforcements into Muammar Gaddafi's strategic hometown of Sirte against rebels advancing from the east under cover of UN-mandated air strikes.

Libya's army is pouring reinforcements into Muammar Gaddafi's strategic hometown of Sirte against rebels advancing from the east under cover of UN-mandated air strikes.

Units of regular soldiers in jeeps mounted with heavy machine guns were driving towards the town on Monday as the frontline moved ominously closer to a key regime stronghold for what could turn out to be the decisive battle of the war.

On Sunday night at least 18 large explosions were heard in or near Sirte, apparently part of the coalition's campaign of attacking air defences and other military targets. But reports that the city had fallen to the Benghazi-based rebels were evidently wrong – and fuelled Libyan fury at the satellite TV channels that claimed it had.

It was firmly in government hands and its people defiant. "I saw death with my own eyes," said Fawzi Imish, whose house and every other in his seafront street had its windows shattered by a Tomahawk missile strike in the early hours of the morning. "It was just intended to terrify people. And if the rebels come here, we will receive them with bullets."

Sirte, where the young Gaddafi was educated, is halfway between the rebel east and the area controlled by the regime along the Mediterranean coastal highway. In the 1980s the Libyan leader famously drew a "line of death" across the Gulf of Sirte in brazen challenge to the US.

If the rebels took the city it would be a severe blow, weakening Gaddafi's position in the centre of Libya and the road would be open for an advance on Tripoli 280 miles away.

Crowds gathered in central Martyrs Square to chant pro-regime slogans and fire bursts of machine-gun fire into the air – that bizarre Libyan ritual of celebrating reverses and expressing determination to resist. But there were signs of anxiety when an aircraft was heard far overhead. Many shops were shut.