Updated at 3 p.m.
The Gadhafi regime denied rebel claims Khamis Gadhafi was killed in a NATO air strike over night, but showed no definitive proof.
NATO is also looking into the disputed claim, but also was unable to confirm the Russian-trained Libyan military commander is dead.
When Gadhafi's son, Saif al-Arab Gadhafi, was killed earlier in the war, the regime admitted he was lost in a NATO air strike.
Khamis Gadhafi may be the most crucial military leader remaining in the regime. His 32nd brigade is considered a fierce well-trained and heavily armed fighting force.
"It's false news. This is a dirty trick to cover up their crime in Zlitan and the killing of the al-Marabit family. They invented the news about Mr Khamis Gaddafi in Zlitan to cover up their killing," regime spokesman Moussa Ibrahim told Reuters.
Alliance warplanes turned up the heat on Moammar Gadhafi, bombing sites around Tripoli and elsewhere amid rebel claims the dictator's youngest son was killed in a strike overnight in Zlintan.
Gadhafi's son, Khamis, a top military commander, and about 30 of his troops were killed in a NATO bombing run, a rebel spokesman claimed, citing spies among the loyalist forces.
"Overnight there was a aircraft attack by NATO on the Gadhafi operations room in Zlitan and there are around 32 Gaddafi troops killed. One of them is Khamis," rebel spokesman Mohammed Zawawi told Agence France Press.
The regime and NATO have yet to comment on the report. Gadhafi's son, Saif al-Arab Gadhafi, was killed earlier in the war.
In other news, Libyan rebels reportedly turned off a major pipeline in the Nafusa mountain region fueling the last refinery under control of the limping regime.
"The rebels turned off a valve and poured cement over it," said Libyan Deputy Foreign Minister Khaled Kaaim. (Rebel information sources tell me the Nafusa brigades shut down the pipeline more than a month ago).
NATO and the Libyan rebels have stepped up efforts to induce the civilian population of Tripoli to rise up against Gadhafi in a strategy seen as the speediest way to topple the regime after five months of fighting.
In rare warfare in the Mediterranean Sea, the rebels seized the regime's oil and gas tanker Cartagena with the help of NATO warships. The ship is now docked in Benghazi.
Also in Benghazi, a group of powerful intellectuals called the Coalition for the Revolution of the 17th of February and an alliance of more than two dozen Libyan tribes called for resignations of men they believe are responsible for the apparent assassination last week of commanding Gen. Abdel Fattah Younes and two of his senior military advisers.
They demanded Transitional National Council Vice Chairman Ali al-Essawi, Judge Jumaah al-Jazwi al-Obeidy Defense Minister Jalal el-Digheily, and the commander of the allied militia, Fawzi Bu Kitf all step down and ultimately face charges. The action is seen as a message to the West and rival clans that lawlessness will will not be tolerated.
While the rebels are trying to improve their public image, Gadhafi's son Saif al-Islam Gadhafi could use a public relations person. In an interview with The New York Times, Saif al-Islam Gadhafi said the regime is trying to form an alliance with Islamists and will eventually weed out secular Libyans.
"We don't trust them, but we have to deal with them." Saif al-Islam Gadhafi said of the
"Libya will look like Iran, like Saudi Arabia. So what?" Saif al-Islam barked.