By Mohammed Abbas and Alexander Dziadosz

  RAS LANUF, Libya (Reuters) - Ground forces loyal to Libyan leader Muammar Gaddafi, backed up by warplanes, pushed rebels away from the coastal town of Bin Jawad on Sunday to stop their advance on Gaddafi's home town of Sirte.

  One fighter, returning wounded from Bin Jawad to rebel-held Ras Lanuf further east, said Gaddafi loyalists had ambushed advancing rebels with machineguns and rocket-propelled grenades.

  Asked what he had seen, he replied: " Death." Distraught and bandaged, he would not say any more.

  In the rebel-held city of Benghazi, a source in the rebel movement said rebels had captured " some British special forces" who were " safe and in good hands." Earlier, Britain's defence minister said a UK diplomatic team was in Benghazi.

  Rebels had taken Bin Jawad, 160 km (100 miles) from Sirte, on Saturday but later withdrew, which let army units occupy local homes and set up sniper and rocket propelled grenade positions for an ambush that forced rebels back to Ras Lanuf.

  " It's real fierce fighting, like Vietnam," rebel fighter Ali Othman told Reuters. " Every kind of weapon is being used. We've retreated from an ambush and we are going to regroup."

  " Gaddafi's forces attacked with aircraft and shot from on top of the houses," Ibrahim Boudabbous, a fighter who took part in the rebel advance, said.

  Doctors and other staff at Ras Lanuf hospital said two dead and 22 injured had arrived so far from fighting in Bin Jawad. Witnesses said there were many dead and wounded who could not be reached because of the fighting, including civilians.

  " SHOUTING AND SCREAMING"

  One man said he had seen a civilian building hit by a bomb.

  " The wounded people shouted at us to get their children out. We left the dead," said Khaled Abdul Karim, a rebel fighter.

  " I saw civilians shouting and screaming. They had been pushed out of their homes. I saw about 20 to 25 people who looked dead, they were civilians or rebels," said Ashraf Youssef, a rebel fighter.

  Some rebels said the people of Bin Jawad were traitors and sided with Gaddafi's forces. " There has been treachery. I saw people in civilian clothes firing on us," said Ibrahim Rugrug, a rebel fighter. His comments were echoed by others.

  But some in the group criticised Rugrug's accounts, saying: " They are our brothers. They were forced by Gaddafi."

  During the fighting, Libyan forces said they had shot down a helicopter. Three rebel fighters told Reuters they had seen it falling into the sea, but no further details were available.

  On the road that leads from the coastal highway to Ras Lanuf, a poster had been put up showing the picture of a bloody body with gaping wounds, saying in English: " Bare chests versus aircrafts." Rebels have called for a " no-fly" zone to protect them from Gaddafi's planes.

  Dozens of rebel vehicles armed with heavy machineguns arrived in Ras Lanuf after the ambush and were regrouping.

  Other rebel fighters in Ras Lanuf said they had received news of the attack by telephone from the frontline. " Some rebels have been hit by snipers," one of them, Khamis al-Libi, said.

  The government said on Sunday it had driven the rebels, who took over eastern Libya over a week ago, all the way back to their eastern stronghold of Benghazi.

  " THEY'RE ALL REBELS HERE"

  But the rebels were still clearly in control of Benghazi and the key oil complex of Ras Lanuf, which they took on Friday night. " They're all rebels here," a witness in Ras Lanuf said. A warplane struck Ras Lanuf on Sunday but no one was hurt.

  Britain has a diplomatic team in the city of Benghazi, Defence Secretary Liam Fox said. He declined comment on a report Libyan rebels had captured a British special forces unit who had been on a mission to contact opposition leaders.

  One rebel commander said earlier his forces had pushed west from Bin Jawad and controlled the town of al-Nawfaliyah, 120 km (74 miles) from Sirte, where they would await a call from citizens in Sirte before advancing. There were differing accounts of whether al-Nawfaliyah was still rebel held.

  " It's not difficult to take Sirte," Colonel Bashir Abdul Gadir told Reuters. " I think 70 percent of regular people are with us there, but they have asked us not to go into Sirte fearing heavy battles. We're going to wait till they call us to let us know when they are ready."

  The colonel, speaking in Ras Lanuf, said there were about 8,000 rebel soldiers between Ras Lanuf and al-Nawfaliyah and Gaddafi's forces were reinforcing the Libyan leader's hometown of Sirte, further west down the coast, from the south.

  " We have our brothers in Sirte and they won't accept this situation. They know he is a killer and stole our money and they are going to be with us," Abdul Gadir said, denying the latest Libyan government statements that it controls Ras Lanuf.

  In Libya's eastern second city of Benghazi, where the uprising began, Colonel Lamine Abdelwahab, a member of the rebel military council for the Benghazi area, said:

  " We have received contact from members of the Gaddafda tribe (Gaddafi's tribe) in Sirte who want to negotiate ... There will be no negotiations. They are asking us what we want. We say we don't want Gaddafi (in power)."

  Abdelwahab said soldiers belonging to the Ferjan tribes were executed for refusing to fight rebels. " They (the Ferjan tribe in Sirte) are joining the rebellion because of this atrocity. The problem is that they are unarmed. Only the Gaddafda were armed by the regime."

  Gaddafi may have more than 20,000 fighters in Sirte, he said, adding that the city houses the Saadi (son of Gaddafi) battalion which includes four brigades, in addition to his armed tribe members.

  (Additional reporting by Tom Pfeiffer in Benghazi and Alex Dziadosz in Ras Lanuf Writing by Peter Millership editing by Philippa Fletcher)

ISMAILIA, Egypt (Reuters) - Shipping at Egypt's Suez Canal was unaffected by a strike by canal employees on Saturday, a Suez Canal Authority (SCA) official said.

  Dozens of employees at the Suez Canal gathered in front of one of the canal's administrative buildings in the northeastern city of Ismailia on Saturday to demonstrate against the head of the canal authority.

  The demonstrators waved banners and expressed various grievances such as low pay and delays in promotions, which they said the SCA Chairman Ahmed Fadel had not yet addressed.

  Suez Canal employees have been among the civil servants and workers who have gone on strike at businesses and factories across Egypt since the toppling of Hosni Mubarak on Feb 11., empowered by a newly found outlet for public expression.

  The Suez Canal is an important source of foreign currency for Egypt, along with tourism, oil and gas exports and remittances from Egyptians living abroad.

* Confident grain prices " basically stable" -official

  * Govt undecided on vegoil price cap extension -COFCO

  * Wheat stocks 100 mln tonnes -NDRC

  (Adds COFCO comment, NDRC chief on reserves)

  BEIJING, March 6 (Reuters) - Drought in China's major wheat producing areas is expected to have a limited impact on the winter wheat crop, which only accounts for about 20 percent of the country's total annual grain output, a senior agricultural official said on Sunday.

  " The unfavorable factors (from the drought) can be eliminated through efforts," Chen Xiwen, deputy head of the central government's rural work leading panel, told reporters at China's annual parliamentary meeting.

  The drought in 75 percent of affected wheat areas has been relieved since the Lunar New Year holiday last month, thanks to the government's anti-drought measures and three major spells of rainfall, Chen said.

  The country's State Administration of Grain said last week that China will reap another bumper harvest this year despite the winter drought in main growing areas.

  Chen also said he was confident China's grain prices will maintain " basically stable" through government measures that include boosting grain production.

  China's grain prices rose by less than 20 percent year-on-year since the start of 2011, while global grain prices have doubled during the same period, he said.

  Some traders and analysts saw China's drought a sign of a possible weakening in its wheat position, which helped spur U.S. wheat futures < O#W:> .

  Chinese officials have repeatedly stressed China's overall grains self-sufficiency and said China, the world's largest wheat producer, holds abundant wheat stocks.

  Zhang Ping, head of China's National Development & Reform Commission, the country's top economic steering body, said on Sunday that China holds grain reserves equal to 40 percent of annual consumption. Stocks of wheat stood at 100 million tonnes, or about one year's worth of total Chinese output, he said.

  Frank Ning, chairman of the state-owned COFCO Ltd, China's top grain trader, said the government has not decided if it will extend its price cap on cooking oil prices beyond March.

  The cap has already hurt crushers who have been unable to pass on the rising import costs of soy.

  " I believe the government may offer some policies, either with subsidies or others if it extends the policy. It is hard for companies to bear the cost," Ning told reporters.

  Beijing asked companies, including COFCO, not to raise retail prices of vegetable oil for four months as part of efforts to cool food price rise. The price cap will expire by the end of March.

  (Reporting by Tracy Zheng and Niu Shuping Editing by Daniel Magnowski)

 

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