Updated

Libyan militias operating alongside the defense ministry readied their forces Tuesday to advance on a town that remains a bastion of support for the ousted regime of Moammar Gadhafi, stoking fears of an impending battle that has already sent dozens of families fleeing.

Bani Walid is one of the last major pockets of support for the former regime, and disarming its militants is one of the most daunting tasks facing the government. Militias in the town of about 100,000 people are heavily armed with rocket-propelled grenades, automatic weapons and artillery left over from last year's eight-month civil war.

During the war, many blamed the town's fighters for the worst of the sniper attacks, shelling, rape and other violence during the bloody siege of the coastal city of Misrata. Calls for revenge again peaked after the death last week of a well-known 22-year-old former rebel fighter after ill treatment at the hands of militiamen from Bani Walid.

Omran Shaaban had been hailed as the first fighter to find Gadhafi hiding in a drainage ditch last October, leading to the dictator's capture and killing. Seen as a hero to many, Shaaban's death raised the prospect of more score-settling. The same day of his death, the newly elected National Congress authorized the police and army to use force if necessary to apprehend those who abducted Shaaban and three of his companions in July near Bani Walid.

The government had brokered Shaaban's release and he was transferred to a hospital in France where he died of his wounds. He had been paralyzed from the waist down and relatives say his chest had been slashed with razors during his 55 days in captivity.

At least four residents of Misrata are still being held by the town's militias, according to local activists.

Militia commander Faraj al-Swehli said dozens of families have fled Bani Walid in anticipation of an offensive. On Tuesday three fighters from Misrata were wounded in clashes during a surveillance operation near the town, according to witnesses.

Al-Swehli ordered his Tripoli-based militia, originally from Misrata, to join others who have surrounded parts of the town. They are operating together in a loose coalition of the country's largest militias known as Libya Shield, which is relied on by the defense ministry. Shaaban was a part of the group before his death.

The government has given Bani Walid's leaders until this coming Friday to handover suspects linked to the torture of Shaaban.

Libya Shield fighters put out a statement Tuesday saying they will not enter Bani Walid without orders from the military chief of staff Gen. Youssef Mangoush. However, even without government orders the militias began surrounding parts of the town last week.

The Libyan government remains weak and has been unable to rein in armed militias in a country awash with weapons. Earlier this month, a demonstration at the U.S. Consulate in the eastern city of Benghazi turned violent, killing four Americans, including the U.S. ambassador.

Misrata activist Ahmed al-Madany said he heard the local Bani Walid radio station say that its fighters will defend the town to the last man.

"I doubt they will turn the suspects in," he said.

A resident inside Bani Walid, who wished to remain anonymous for fear of reprisal, said militias inside have set-up checkpoints to secure the area.