Reports say rockets landed near Libyan revolutionary forces with positions near Wadi Dinar, about 20km outside the town, where thousands of fighters for Libya’s interim leadership have converged.
However, no damage has been reported as the result of the attack.
The development comes hours after the National Transitional Council (NTC) announced that talks on a peaceful surrender of the city had collapsed. The NTC gave Gaddafi loyalists in Bani Walid until Saturday to surrender or face a military confrontation.
The Libyan revolutionary forces are also moving toward Gaddafi’s hometown of Sirt. A military commander says they have taken a key valley just 60 kilometres west of Sirt.
Gaddafi, meanwhile, has vowed to defeat what he has described as rats. In a telephone message broadcast on the Syrian based channel, Al-Rai TV on Thursday, Gaddafi denied rumors that he had fled Libya and vowed never to flee his ancestral land, pleading with his followers to keep fighting.