A BBC correspondent just outside the city says pro-Gaddafi forces are putting up extraordinary resistance in defence of what seems a lost cause.
Interim troops pushed deep into Muammar Gaddafi's birthplace on Friday, taking most of it street by street.
At least 12 people were killed and more than 190 injured, doctors said.
Thousands of civilians have left Sirte but many remain behind.
On Friday, the two sides battered each other with mortar shells, rockets and tank fire in what transitional government (NTC) forces described as the final assault on Sirte, some 360km (225 miles) east of the capital, Tripoli.
Anti-Gaddafi forces seized control of virtually all of Libya nearly two months ago, ousting the long-time former leader.
The colonel fled Tripoli when the capital fell to the NTC and his whereabouts remain unknown while several of his family members are in hiding or have fled the country.
But he is not thought to be in Sirte, which has been under siege for weeks, the BBC's Jonathan Head reports.
Two-pronged assault On Saturday morning, NTC tanks were in action again and artillery shells were being fired into the centre, where two or three pockets of strong resistance remain.
Gaddafi loyalists are believed to be concentrated in the Ouagadougou conference centre, the university area and, according to AFP news agency, a district known as the Mauritanian Quarter.
"We are surrounding them in the centre of the city in an area of just a few square kilometres [miles]," NTC commander Nasser Abu Zian told the agency.
NTC troops converged on Sirte from Misrata in the west and Benghazi in the east, meeting heavy resistance from tanks and small arms as they advanced towards the city centre.
The UN envoy to Libya, Ian Martin, called on both sides to respect human rights and appealed to the NTC to avoid reprisals.
Those accused of war crimes should be detained and brought to justice, he said.
Checkpoint queues Ambulances brought a steady stream of the wounded to a field hospital west of Sirte on Friday.
"We are receiving many gunshot wounds, mostly to the head, neck and chest from sniper fire," Dr Ahmed Mohammed Tantoun told the Associated Press.
The NTC gave civilians the opportunity to leave before the assault began.
However, thousands remained in the city, unable to get out or fearful after warnings from pro-Gaddafi fighters that they would be attacked by the interim forces if they surrendered.
The NTC's Information Minister, Mahmoud Shamman, told the BBC that civilians in the city were being "kept hostage by Gaddafi fighters".
Efforts to negotiate with loyalist commanders have also failed. On Thursday, Col Gaddafi urged Libyans to take to the streets "in their millions" to resist the interim leaders.
In a poor-quality audio message broadcast on Syrian-based Arrai television, he said conditions in Libya had become "unbearable", telling people to make their voices heard against "Nato's collaborators" in the NTC.
Pro-Gaddafi forces also control the desert enclave of Bani Walid, but it is seen as less significant as it does not lead to any exit routes from the country.
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