Internationally backed government says it controls both the port and the airport in ISIL's stronghold in Libya.
Forces loyal to Libya's internationally backed government say they have recaptured both the port and airport of Sirte from the Islamic State of Iraq and the Levant (ISIL), forcing the armed group also known as ISIS to retreat.
The Libyan forces also retook residential areas in the east of Sirte, which for the past year has been the main ISIL base in the North African country, a spokesman for the forces, Rida Issa, told the AFP news agency on Saturday.
ISIL fighters are now surrounded in a densely populated area of around five square kilometres inside the city, where they are laying booby traps, he said.
Most of the city's residents have fled but about 30,000 remain, Issa added.
The fall of Sirte, the hometown of ousted leader Muammar Gaddafi, would be a major setback for ISIL, who have also lost territory in Syria and Iraq, where they have declared a "caliphate".
For weeks, government forces have fought to dislodge ISIL, pounding the port city from the air and land as ground troops wage street battles.
"We will liberate the city of Sirte from ISIL and its terrorism. We will clean up all of Libya and defeat anyone who opposes us in our country," Omar Rhaal, a unity government fighter, said.
The UN envoy to Libya, Martin Kobler, said Saturday on Twitter that he was "impressed" by the "rapid progress" of the Libyan forces.
Foreign intelligence services estimate ISIL has 5,000 fighters in Libya, but its strength inside Sirte, which ISIL has held since June 2015, is unclear.
A total of 137 UN-backed government forces have been killed and 500 wounded since the beginning of the operation on May 12, according to a medical official in the western city of Misrata.
George Joffe, a lecturer at the University of Cambridge, said ISIL's retreat in Libya could result in the formation of a new Libyan army.
"It means that the new government in Tripoli has acquired credibility," he told Al Jazeera.
"We know that two other militias in the east have now decided to join up with the Misrata militia, and there, we are seeing a nucleus perhaps of a new Libyan army beginning to be formed."
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|Liaquat Ali Khan|