Moammar Gadhafi loyalists seized control of a Libyan mountain city in the most serious challenge to the central government since the strongman's fall, underlining the increasing weakness of Libya's Western-backed rulers as they try to unify the country under their authority.

The taking of Bani Walid, one of the last Gadhafi strongholds captured by the new leadership late last year, was the first such organized operation by armed remnants of Gadhafi's regime. A simultaneous outbreak of shootings in the capital and Libya's second largest city Benghazi raised authorities' concerned that other networks of loyalists were active elsewhere.

The security woes add to the difficulties of the ruling National Transitional Council, which is struggling to establish its authority and show Libyans progress in stability and good government. Bani Walid's fall comes after violent protests in Benghazi, where Libyans angry over lack of reform stormed the NTC headquarters and trashed offices.

In Bani Walid, hundreds of well-equipped and highly trained remnants of Gadhafi's forces battled for eight hours on Monday with the local pro-NTC revolutionary brigade, known as the May 28 Brigade, said Mubarak al-Fatmani, the head of Bani Walid local council. The brigade was driven out and Gadhafi loyalists then raised their old green flag over buildings in the western city.

Four revolutionary fighters were killed and 25 others were wounded in the fighting, al-Fatmani said.

There were no immediate signs that the uprising was part of some direct attempt to restore the family of Gadhafi, who was swept out of power in August and then killed in the nearby city of Sirte in October. His sons, daughter and wife have been killed, arrested or have fled to neighboring countries.

Instead, the fighting seemed to reflect a rejection of NTC control by a city that never deeply accepted its rule, highlighting the still unresolved tensions between those who benefited under Gadhafi's regime and those now in power. Those tensions are tightly wound up with tribal and regional rivalries around the country.

The May 28 Brigade had kept only a superficial control over the city, the head of Bani Walid's military council, Abdullah al-Khazmi, acknowledged.

"The only link between Bani Walid and the revolution was May 28, now it is gone and 99 percent of Bani Walid people are Gadhafi loyalists," he said.

He spoke to The Associated Press at a position on the eastern outskirts of Bani Walid, where hundreds of pro-NTC reinforcements from Benghazi were deployed with convoys of cars mounted with machine guns, though there was no immediate move to retake the city.

The fighters who captured the city Monday night belong to Brigade 93, a militia newly created by Gadhafi loyalists who reassembled after the fall of the regime, said al-Khazmi and al-Fatmani. The fighters, flush with cash and heavy weaponry including incendiary bombs, have been increasing in power in the city, they said.

There was no possibility to confirm their claims. However, there was no mass evacuations from the town after the clashes, an indication that the residents appear to accept the new arrangement, said Ali al-Fatmani, a revolutionary brigade commander in Bani Walid.

Authorities in Benghazi, where the NTC is centered, appeared concerned that the Bani Walid uprising could have sent a signal to other cells of Gadhafi forces.

An AP reporter who was present in Benghazi operation room heard military commanders on Monday saying coordinated incidents of drive-by shootings in Tripoli and, to a lesser extent, Benghazi erupted as news of the Bani Walid takeover spread. In Tripoli, some shops closed, and fighters responsible for security in the capital were on a state of alert over the shootings.

Five months since the Gadhafi regime's fall and three months since his death, the National Transitional Council has so far made little progress in unifying armed forces. Instead it relies largely on multiple "revolutionary brigades," militias made up of citizens-turned-fighters, usually all from a specific city or even neighborhood.

The militias were created during the months of civil war against Gadhafi's forces last year, and when the war ended in October, the various brigades remain in control of security affairs of each city they liberated. Though loyal to the NTC, they have also feuded among themselves and acted on their own initiative, and the council has been unable to control them.

A month ago, Gadhafi loyalists attacked another revolutionary brigade from Tripoli that entered Bani Walid, killing 13, said Mubarak al-Fatmani.

"The council (NTC) did absolutely nothing," said al-Fatmani, who resigned from his local council chief post to protest the NTC's failure to investigate the ambush. He still holds his position, since his resignation has not yet been accepted.

The council has faced increasing complaints that it is doing little to bring stability to the country. It faces a daunting task, since Gadhafi's regime stripped Libya of most institutions, and the civil war has stirred up widespread divisions, rivalries and resentments.

In the Benghazi unrest last Saturday, protesters broke into the NTC headquarters, smashed windows and carted off furniture and electronics, then threw bottles at NTC chief Mustafa Abdul-Jalil as he tried to address them and torched his car. The next day, Abdul-Jalil suspended the Benghazi representatives on the council in an apparent attempt to appease protesters. The deputy chief of the NTC resigned in protest over the suspension.

Bani Walid, a city of 100,000 located in the mountains 90 miles (140 kilometers) southeast of Tripoli, held out for weeks against revolutionary forces after Gadhafi's fall from power, with loyalist fighters dug into its formidable terrain of valleys and crevasses. Pro-NTC fighters finally took it in October.

The main tribe in Bani Walid is a branch of the Warfala tribal confederation, which stretches around the country with around 1 million members. The Bani Walid branch was one of the most privileged under Gadhafi, who gave them top positions and used their fighters to try to crush protesters in the early months of last year's uprising against his rule.

That has left a deep enmity between the tribe and others. Ali al-Fatmani said Bani Walid loyalists were among Gadhafi troops that tried to march on Benghazi during the civil war and were used to in the siege of Zawiya, west of Tripoli. There were reports, he said, that Bani Walid fighters desecrated graves of fallen revolutionary fighters in Zawiya.

"The hatred and mistrust have been building up during the revolution," said al-Fatmani, himself a Warfala.