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Slideshow By Hadeel Al Shalchi and Ghaith Shennib TRIPOLI/BENGHAZI, Libya | Tue Oct 23, 2012 4:03pm EDT TRIPOLI/BENGHAZI, Libya (Reuters) - The Libyan army and allied militias have seized control of strategic buildings in the former Gaddafi stronghold of Bani Walid, a military spokesman said on Tuesday, as Libya marked the first anniversary of its "liberation" from Muammar Gaddafi. Thousands have fled the violence in the isolated hilltop town, which was one of the last to surrender to rebels last year, and has been at the center of a bloody standoff this month between rival militias whose ferocity has underscored the extent of instability in the North African country. Colonel Ali al-Shekhili said the army, which was backed by a group of militias known as "Libya's Shield" who are loyal to the defense ministry, had pushed into the center of Bani Walid some 170 km (105 miles) south of Tripoli. "Our forces reached the center of the city and are in control of the airport, hospital and other important places," he said. "We faced very little resistance, and shelling of the city will only continue if there is resistance." Pro-government forces moved up to Bani Walid this month after rebel fighter Omran Shaban died after two months in detention there. Shaban, from the rival city of Misrata, was the man who found Gaddafi hiding in a drain pipe outside Sirte. Libya's congress ordered the Defense and Interior Ministries to find those suspected of abducting, torturing and killing Shaban, and gave Bani Walid a deadline to hand them over. The siege of Bani Walid highlighted the government's inability to reconcile groups with long-running grievances, as well as its failure to bring many of the militias that deposed the late dictator fully under its control. "The militias have entered the suburbs with bulldozers and have begun to demolish homes without reason," Abdel-Hamid Saleh, a member of a Bani Walid civil society group, said by phone. "A woman called me yesterday screaming 'They have come for me, they have come for me' in fear. The city is falling on our heads." "LIBERATED" Libya was declared "liberated" a few days after Gaddafi's death on October 20, 2011, and while its new rulers have held elections, they have struggled to impose their authority on a country awash with weapons. "Our happiness is not complete because there are still some cities that are not fully liberated," said 27-year-old Benghazi shop assistant Baset al-Sharif. "But October 23 is still a great day and we will celebrate. We will use this occasion to say Benghazi has not yet been given all its rights. The government still has problems to deal with." Hundreds of people filled Benghazi's streets celebrating the anniversary but also called for the eastern city, the cradle of last year's revolt, to become Libya's economic capital after what they said were decades of neglect under Gaddafi. About 300 people protested outside a hotel over the Bani Walid violence. Blocking off the street, some chanted: "Where are the Libyans when this massacre is happening?" In Tripoli, the celebratory mood gained pace in the evening as cars flying the Libyan flag and playing patriotic music, filled the streets amid tightened security. Fireworks lit up the sky over Martyr's Square, where hundreds of families gathered. "We want to express our feelings of happiness that we have never felt this strongly before," said Tripoli resident Muna Abdelsalam, who came to the square with her daughters. "A revolution is going to be difficult and will have problems, but despite the insecurity we are better off today than a year ago." (Writing by Marie-Louise Gumuchian; Editing by Andrew Osborn) World Libya Middle East Turmoil Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) Donsays wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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