A New York Times reporter on the scene in Zawiya found the opposition and army units that had turned against dictator Moammar Gadhafi in control and armed with tanks and anti-aircraft guns.
Regime forces were holding on in Tripoli, but Misarata, the country's third-largest city 130 miles east of the capital, has reportedly fallen to rebels as well.
In the "liberated" city of Benghazi in the east, opposition forces nominated Mustafa Mohamed Abd al-Jalil, who quit as Gadhafi's justice minister only last week, to lead a provisional government.
He earlier told al-Jazeera the rebels do not want to partition the country.
"We want one country. There is no Islamic emirate or al-Qaida anywhere," he said. "Our only goal is to liberate Libya from this regime and to allow the people to choose the government that they want."
U.S. Secretary of State Hillary Clinton said Sunday as she left Washington for Geneva that the United States is "reaching out to many different Libyans who are organizing in the east" but it is too soon to recognize a provisional government.
On Saturday, Gadhafi promised each Libyan family $400.
The announcement came as the United Nations Security Council voted unanimously to impose sanctions on the government for its military response to demonstrations that have killed at least 1,000 people, the U.N. and rights groups said.
The council declared an arms embargo, an international freeze on all Gadhafi family assets and travel bans, CNN said.
The council also approved prosecuting Gadhafi for war crimes at the International Criminal Court at The Hague in the Netherlands, The New York Times said.
Meanwhile, the U.N. High Commissioner for Refugees agency said at least 100,000 people had fled Libya's borders, most of them to Tunisia.