Ajdabiya, Libya ? Government soldiers and rebel gunmen battled in the streets of a key front-line city Saturday after the Libyan military used shelling and guerrilla-style tactics to open its most serious push into opposition territory since international airstrikes began. At least eight people were killed, a hospital official said.

Recapturing Ajdabiya would give the Libyan military a staging ground to attack the rebels’ main stronghold, Benghazi, about 100 miles farther east along the coastal highway. Moammar Gadhafi’s forces were approaching Benghazi when they were driven back by the international air campaign launched last month to protect civilians and ground Gadhafi’s aircraft.

For the rebels, losing the city would effectively bottle them into a coastal strip of eastern Libya and allow government forces to more tightly squeeze the few opposition pockets in the rest of the country, including the besieged western port of Misrata, where heavy clashes continued Saturday for a second day.

The push into Ajdabiya was launched even as international envoys opened fresh initiatives for a peace deal. The African Union said it planned to send a team to Libya today to begin meetings with the government and rebel leaders.

In the capital Tripoli, meanwhile, Gadhafi made his first public appearance in weeks with a visit to a school. Children jumped on desks and gave fist-pumping chants: “The people want Moammar the leader!”

Wearing large black sunglasses and a brown turban and robe, Gadhafi made no public comments, according to the account on state TV. Gadhafi has remained mostly in hiding since the airstrikes began, preferring to communicate by telephone to government-run television.

The battle for Ajdabiya showed how Gadhafi’s forces are adapting their strategies amid NATO airstrikes seeking to cripple the Libyan military.

Small and mobile units — less vulnerable to airstrikes than tanks and other armor — first ambushed a rebel convoy probing the lines outside the city. Government gunners then began shelling Ajdabiya from desert positions and later ferried soldiers into the streets using civilian vehicles in attempts to foil NATO pilots.

A possible NATO airstrike, kicking up a huge mushroom cloud, temporarily halted the shelling. NATO officials did not immediately confirm the attack.

A helicopter gunship — possibly a rebel aircraft coming from the direction of Benghazi — passed over the city during the fighting.

By nightfall, heavy gunfire was heard from apparent block-to-block combat inside the city, which had about 150,000 residents before many fled for safer areas.