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Despite mounting evidence that Libyan strongman Muammar al-Qaddafi is losing his grip on power and running out of options, his government is putting on a brave face amid recent rebel gains and the deteriorating situation in his besieged capital Tripoli. On Thursday, the country’s Prime Minister Baghdadi Ali al-Mahmoudi insisted the Libyan military was strong enough to end the conflict, but said it was "high time for a cease-fire" citing the increasing bloodshed. Speaking through an interpreter, al-Mahmoudi also rejected press reports and rebel claims that they have taken control of the strategic port city of Zawiyah,juicy couture just 30 miles west of the capital, after six days of intense fighting. "I want to assure you the Libyan government is still strong and resilient and is in control of the country and all its territory,” said al-Mahoudi. "Az Zawiyah is under our full control.” "In terms of our military strength we are powerful enough to finish this fight, but the cost in lives would be too high," he said referring to possible government counterattacks. "We are a tribal people and the risk of this violence spreading is too great," al-Mahmoudi said. This assessment is in stark contrast to a Pentagon statement on Wednesday which described the territory captured by rebels in recent weeks as "significant developments." Pentagon spokesman George Little said combined with sustained pressure from NATO operations and the economic and diplomatic sanctions, "the future doesn't look particularly bright for (Libyan leader Col. Muammar) Qaddafi, but we'll have to see where things go." As if to drive the point home, the Libyan Prime Minister's upbeat take on the situation on the battlefield was preceded by a volley of NATO bombs. Four loud explosions shook the government building as foreign journalists waited for the weekly cabinet meeting to break up. Staff who rushed downstairs said the suburb of Tajura several miles to the east was being bombarded. And, despite repeated denials by leaders of the opposition National Transitional Council (NTC) that a peace deal is being worked out in secret to end the six-month long war, al-Mahmoudi hinted that a negotiated solution could be just days away. "In the next day or two you will hear good news that will make you happy if you are for peace,” he said. On the issue that counts though, whether Muammar al-Qaddafi will relinquish his leadership and leave the country, the Libyan government is holding firm. "The leader will stay in Libya and will continue to be loved by many. He is not involved in the political dialogue,” said al-Mahmoudi. Qaddafi’s ousting, however, is a pre-condition of any peace talks for the NTC. In the meantime, the pressure continues to grow on Qaddafi, who has held the reins of power in Libya for more than 41 years. After three weeks of intense battles on several fronts, the Libyan rebels have cut off the capital and Qaddafi's political base has suffered through high profile defections. Using NATO air power to clear the way, rebels pushed into Zawiyah Saturday. On Thursday, they insisted they had cleared out the last remaining pockets of pro-government resistance, including fighters holed up in a nearby oil refinery. If they take and hold Zawiyah, they will control one of the last significant sources of fuel for Qaddafi’s army. Zawiyah also straddles the main highway between Tunisia and the Libyan capital of Tripoli over which crucial supplies of food, gas and medicines had been flowing, providing the regime with a desperately needed lifeline. The roads south and east of Tripoli are also blocked by militias loyal to the NTC which is headquartered in the breakaway city of Benghazi. Rebel commanders predicted before the start of these latest offensives that they would have Tripoli in their sights before the end of Ramadan on Aug. 30. Libyan Deputy Foreign Minister Khaled Kaim last week claimed the “armed gangs” were making suicidal advances to stick to a schedule imposed by NATO. “The rebels we have arrested say they are under heavy pressure from NATO. They’re being told that they must win because those governments are under pressure from their own people (to end the war),” Kaim said. NATO’s mandate, authorized by United Nation's Security Council, to maintain an arms embargo, enforce a no fly zone and take all necessary measures to protect civilians in Libya, expires on Sept. 27 and has already been extended once before. Tripoli, meanwhile, is working towards a crucial date of its own. Sept. 1 is the anniversary of the Al-Fateh (which in Arabic means the conqueror) revolution, which swept Qaddafi to power almost 42 years ago. Scaffolding is going up in Tripoli's Green Square ahead of the celebration. “They (NATO) want to end this before the anniversary of the Al-Fateh revolution,” said government mouthpiece Moussa Ibrahim. It’s likely the Qaddafi camp will use the date as a rallying call to its followers to continue to resist rebel advances and defend Tripoli against an assault that now seems inevitable.