With clashes reported in Tripoli, Sirte still embattled and Muammar Gaddafi still at large, observers fear the prolonged confrontation opposing the National Transitional Council and Gaddafi loyalists could plunge the country into chaos.
After months of conflict and shortages of food, fuel, water and medicines, the new Libyan government still has a lot of work ahead before it can claim the country is liberated and under its full control.
Following repeated clashes in Tripoli, security had now been increased, with the police establishing extra roadblocks and conducting house-to-house searches.
With fighting in the capital last week, fear of a new insurgency led by the Gaddafi forces in the capital surfaced, prompting the new Libyan leaders to take new measures.
Even though clashes were mainly reported in a few neighbourhoods of Tripoli, groups hostile to the NTC are still making their voice heard.
The country was flooded with arms during the months-long conflict, and observers fear arms could still help fuel insurgency against the transitional government, further hampering efforts to implemental the transitional phase which should lead to the planning of elections.
Anti-government sentiment is also rising as the struggle has cost scores of lives and left thousands homeless and internally displaced.
The government's forces have also struggled to take over the embattled city of Sirte, Gaddafi's birthplace where the rebels have met fierce resistance.
"It is taking so long because the area is crowded with buildings and there is a large number of them; between 400 to 500 Gaddafi men," said Hussein Alteir, a brigade commander in Sirte.
As the battle for Sirte continues, a Medecins Sans Frontieres doctor at Sirte's Ibn Sina hospital told Reuters he estimated there were still some 10,000 people marooned by the fighting in the city of 75,000 residents, including women and children and sick or injured people.
Yahia Alivi, a spokesman for the International Committee of the Red Cross at the same hospital, also complained there only was limited information about the situation inside of Sirte.
"Behind the front line, we have no news of the medical situation, but given the degree of fighting and shelling, if there are civilians there, the situation would be very, very dire."
Meanwhile, interim Premier Mahmoud Jibril, formerly a senior Gaddafi economics official, also warned that infighting within the NTC forces also threatens the country's future.
"We are heading towards a political battle, but the rules of the game are not clearly defined," Jibril told a meeting of former rebel forces convened to discuss the establishment of a new state based on the rule of law.
"We went from a national battle to a political battle, and this should not have happened before the creation of a state," Jibril said.
He warned of what he called "the frightening scenario of ... chaos."
It seems that in addition to the split over Gaddafi, a new schism between secular and Islamist can be felt throughout Libya.
With the conflict now threatening turn plotical as diferent groups are set to struggle for political space in the new Libya, Jibril warned, "The political battle needs money, power, organisation and weapons and I have nothing of the above."
"I have nothing left to offer to the Libyan people."