According to fighters stationed at a checkpoint near the oasis town, between 20 and 25 civilian vehicles had passed through the Shumayh checkpoint by mid-morning.
"We hear that there will be fighting. In the town, there is no doctor, no water, no electricity," said a man in a white Mitsubishi that also carried four veiled women.
He said there were "more than 20,000" civilians still holed up in Bani Walid, which is located 170 kilometres (105 miles) southeast of Tripoli.
"There are mercenaries and militia in the streets," said the man, who was taking his family to Nasmah, west of the town, where there is a camp for those displaced by the fighting.
A van loaded with mattresses and a pickup truck carrying sheep sat behind him in line.
Fighters loyal to the National Transitional Council (NTC), which now rules Libya, distributed fruit juice and sweets to the families fleeing the town.
Salem Gheith, head of the NTC military command centre in Tripoli said 17 of its fighters were killed and 50 wounded in clashes with Kadhafi loyalists at Bani Walid on Sunday.
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