A huge fire at an oil depot on the outskirts of Tripoli was out of control Monday, sparking fears of a fireball that could cause carnage over a wide area.
The fire, raging since Sunday night, spread to a second fuel storage site in what the government called a "very dangerous" development.
"The situation is very dangerous after a second fire broke out at another petroleum depot," the government said, warning of a "disaster with unforeseeable consequences".
The blaze erupted when a rocket struck a tank containing more than six million litres (1.6 million gallons) of fuel.
The depots are located 10 kilometres (six miles) from the city on the road to Tripoli's international airport, which rival militias have been fiercely fighting for since mid-July.
Firefighters had been battling to extinguish the blaze, but ongoing clashes repeatedly forced them to flee the area.
A spokesman for the National Oil Company said: "The firefighters have now left the scene. The situation is out of control."
The government urged residents "living within a three kilometre radius of the scene (of the fire) to leave their homes immediately".
In its statement, the government issued yet another appeal to the combatants to "cease fire immediately".
But rockets were still being fired into the area, an AFP photographer at the scene reported.
The authorities feared the blaze could spread still further to a natural gas reservoir, where 90 million litres are stored.
- Pall of black smoke -
Fighting in the area has claimed the lives of 97 people and left more than 400 injured, the latest health ministry figures show.
On Monday, the first day of the Muslim Eid al-Fitr holiday to mark the end of the Muslim fasting month of Ramadan, a huge pall of black smoke hung over the plant and explosions could be heard at regular intervals.
While the oil burns, in Tripoli itself motorists are suffering a severe petrol shortage, as service stations have closed over fears for the safety of staff in light of the fighting.
As the lawlessness spreads, several countries, including Britain, France, Germany and Egypt, have all warned their citizens not to travel to Libya, while the United States evacuated its embassy at the weekend.
Other countries, among them the Netherlands, Belgium, Spain and Turkey have advised their nationals to leave the country immediately.
Italy and Malta have sent aircraft in the past few days to the Miitiga military airport to airlift their nationals out of Libya.
The exodus of foreign workers will further hit the strife-torn country, while the health ministry warned of a shortage of medical staff after the Philippines announced it was withdrawing its citizens, including 3,000 doctors and other healthcare workers.
The Tripoli clashes, the most violent since a 2011 armed revolt which overthrew longtime dictator Moamer Kadhafi, started with a July 13 assault on the airport by armed groups, mainly Islamists.
The attackers are battling to flush out fellow former rebels from the hill town of Zintan, southwest of Tripoli, who have controlled the airport for the past three years.
- Spiralling violence -
Washington evacuated its embassy staff on Saturday, with Secretary of State John Kerry warning the mission had faced a "real risk" from the fighting.
The spiralling violence which has also hit the eastern city of Benghazi, birthplace of the 2011 revolution, where weekend fighting between army special forces and Islamists killed 28 people, mostly soldiers, officials said.
The fighting erupted on Saturday when Islamist groups launched an assault on the headquarters of a special forces unit near the city centre.
Near-daily clashes take place in Benghazi, parts of which have become strongholds for Islamist groups since Kadhafi's fall.
Libya, meanwhile, on Monday denied claims from Cairo that Egyptian nationals were among those killed in a weekend rocket attack on a Tripoli house.
The foreign ministry in Cairo had said a rocket hit a house in the capital on Saturday, killing 23 people, including several Egyptians.
But Libyan interior ministry spokesman Rami Kaal dismissed the claim. "News reported in the press about this incident is completely wrong," he said.