Libya leadership talks fail, as Gaddafi's forces fend off rebel attack (VIDEO)

A Libyan National Transition Council (NTC) fighter arrives in an armored vehicle on the frontline of Bani Walid, southeast of Tripoli, on Sept. 17, 2011.</p>

A Libyan National Transition Council (NTC) fighter arrives in an armored vehicle on the frontline of Bani Walid, southeast of Tripoli, on Sept. 17, 2011.

Libya's interim leaders have failed to form a new cabinet to replace the ruling committee that was dissolved last month.

Meanwhile, forces of the National Transitional Council (NTC) failed again in their attempts to budge remnants of forces loyal to Muammar al-Gaddafi from their positions around the former dictator's home town of Sirte and in Bani Walid.

NTC fighters fell back after a chaotic attempt to storm Bani Walid, a desert oasis 95 miles southeast of the capital, Tripoli.

According to Reuters:

NTC fighters said they had planned for tanks and pickup trucks with anti-aircraft guns and rocket launchers to lead Sunday's attack, but foot soldiers had piled in first.

Pro-Gaddafi forces in the desert town used heavy artillery and snipers to defend their positions, while anti-Gaddafi fighters accused those who came from all parts of Libya to help them of being disorganized and "unwilling to cooperate," Sky News reports.

Meanwhile, troops loyal to Libya's interim leaders have also been advancing towards the coastal town of Sirte, under sniper and rocket fire.

NATO has also been involved in the fighting, BBC reports, citing the U.K. Ministry of Defense as saying that RAF fighter jets had bombed an ammunition facility near the city.

The NTC — still based in the eastern city of Benghazi — must capture Gaddafi and defeat his remaining forces and capture pockets of resistance before it can declare Libya "liberated" and begin the process of elections.

However, officials responsible for Libya's defense and interior affairs were supposed to have been appointed by interim Prime Minister Mahmoud Jibril on Sunday, Reuters reports.

Talks reportedly broke down when Jibril did not receive enough backing for his proposals.

According to Agence France-Presse:

Jibril said last-minute haggling delayed the announcement of the new cabinet line-up before reluctantly announcing to the media that the unveiling would be postponed indefinitely.

However, among the sticking points was the position taken by Jibril — a former member of the Gaddafi regime — during the talks, Reuters reports, citing sources.

Gaddafi has been in hiding since opposition forces captured the capital Tripoli in August.

But his fugitive spokesman has told reporters that Gaddafi is still in Libya, directing resistance.

And on Monday, Moussa Ibrahim said Gaddafi loyalists had captured 17 "mercenaries" — including British and French — a claim that could not be verified, according to a separate Reuters report.

"A group was captured in Bani Walid consisting of 17 mercenaries. They are technical experts and they include consultative officers," Ibrahim reportedly said on Syria-based Arrai television. "Most of them are French, one of them is from an Asian country that has not been identified, two English people and one Qatari."