Libya's rebel force has claimed nine of their fighters and four civilians were killed in a coalition air strike near Brega in the east of the country.
And one of the rebels' spokesmen admitted civilians may have died in air raids carried out by their own planes outside the same town.
Brega is one of a string of oil towns along the coast that have been won and lost by the opposition in recent weeks.
After coalition airstrikes began on March 19, the rebels raced forward to recapture the towns of Ajdabiyah, Brega and Ras Lanuf.
But instead of advancing towards Colonel Muammar Gaddafi's home town of Sirte and the capital Tripoli, the rag-tag rebel group has been forced to retreat and is struggling to hang on to many of its gains.
Opposition fighters have now taken up defensive positions near Brega following their dramatic reversal of fortune.
It was about 10 miles east of the town that the coalition air raid happened, according to a rebel official.
Issa Khamis said the four civilian victims were an ambulance driver and three medical students from the second city of Benghazi, who were part of a rebel convoy of five or six vehicles.
Rebel fighters were reportedly shooting tracer fire into the air to celebrate a group of them advancing into the city when the air strike happened.
But one rebel fighter Mustafa Ali Omar claimed some of Col Gaddafi's forces had sneaked in among the rebels and fired anti-aircraft guns in the air.
"After that the Nato forces came and bombed them," he added.
A Nato spokeswoman said the coalition was looking into the reports.
But the opposition force remains defiant even as Col Gaddafi's forces renew attacks on Misratah - the main city the rebels still hold in western Libya.
Residents said government forces have continued their intense bombardment, and medical officials claim six civilians were killed by sniper fire and the army shelling the area on Saturday.
Doctors said 243 people have been killed and 1,000 others wounded in more than a month and a half of fighting between the two sides.
Amid fierce battles, rebel leaders said they would accept a ceasefire if Col Gaddafi's forces withdrew from key areas they have besieged.
But the regime mocked the offer, dismissing it as "mad".
Libyan government spokesman Moussa Ibrahim said: "The rebels never offered any peace.
"We are the ones who offered peace weeks ago, and we said we are going to talk, and let's sit down.
"The rebels - you're not offering peace if you are making impossible demands. It's a trick."