* No sign of Gaddafi forces in Yafran after siege
* U.S. official says strikes will "roll over" until success
* NATO chief asks for more military support from coalition
* Rebels say Gaddafi forces fire Grads in east, west towns
(Adds Libyan TV says NATO bombs hit telecoms station)
By Youssef Boudlal and Peter Graff
YAFRAN/TRIPOLI, June 6 (Reuters) - Libyan rebels seized all of the mountain town of Yafran on Monday, driving out Muammar Gaddafi's forces in a sign NATO air strikes may be paying off.
Yafran is spread over a hill, the bottom part of which had been controlled by pro-Gaddafi forces for more than a month and used to besiege the rebel-controlled part.
Food, drinking water and medicines were running short.
Yafran, 100 km (60 miles) southwest of Tripoli, is in the Western Mountains where the population, mostly from the Berber ethnic minority, have joined the uprising against Gaddafi.
British warplanes destroyed two tanks and two armoured personnel carriers in Yafran on June 2.
At least two powerful blasts were heard early on Monday evening in Tripoli, where NATO has been bombing targets of Gaddafi's government since March. Libyan television said the neighbourhood of al-Karama was hit by NATO forces.
It later said a telecoms station was hit in a bombing.
"The crusading colonial aggressor this evening hit and destroyed a communications centre west of Tripoli, severing land communications in some areas. The station is civilian," it said.
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The rebels control the east of Libya, the western city of Misrata and the range of mountains near the border with Tunisia. But they have been unable to advance on the capital against Gaddafi's better-equipped forces, despite NATO air strikes.
Asked about reports of rebel gains in the Western mountain area, Libyan Deputy Prime Minister Khaled Kaim told reporters government forces could retake rebel territory in hours, but were holding back from doing so to avoid civilian casualties.
NATO attack helicopters were in action in the east on Sunday. Apaches destroyed a rocket launcher system on the coast near the eastern town of Brega, Britain's Defence Ministry said.
A French military source said French planes and helicopters had been in Libya every night since Friday, but give no details.
Gaddafi's forces also fired rockets into the rebel-held town of Ajdabiyah in the east on Monday and clashes broke out on the main road further west, rebel sources said.
Gaddafi's troops and the rebels have been in stalemate for weeks, with neither able to hold territory on a road between Ajdabiyah and the Gaddafi-held oil town of Brega further west.
The new deployment of the helicopters is part of a plan to step up military operations to break the deadlock. Critics say NATO has gone far beyond its U.N. mandate to protect civilians.
In a report on Monday, the International Crisis Group (ICG) urged the rebels and their NATO allies to propose a ceasefire.
"The (rebels) and their NATO supporters appear uninterested in resolving the conflict through negotiation," it said.
"To insist, as they have done, on Gaddafi's departure as a precondition ... is to prolong the military conflict and deepen the crisis. Instead, the priority should be to secure an immediate ceasefire and negotiations on a transition."
Western governments and rebels say a combination of NATO air strikes, diplomatic isolation and grassroots opposition will eventually bring an end to the Libyan leader's rule.
But Gaddafi says he has no intention of stepping down. He insists he is supported by all Libyans apart from a minority of "rats" and al Qaeda militants, and says the NATO intervention is designed to steal Libya's abundant oil.
"ROLLOVERS" COULD GO ON
In Brussels, NATO Secretary General Anders Fogh Rasmussen sidestepped questions on whether more helicopters were needed, but he said he would repeat calls for NATO allies to step up involvement during a NATO defence ministers meeting this week.
"In general terms, I will request broad support for our operation in Libya, if possible increased contributions, if possible more flexible use of the assets provided," he said.
Britain, along with France, has been the driving force behind the NATO military intervention. British Foreign Minister William Hague travelled to Benghazi at the weekend and called on the rebel National Transitional Council (NTC) to establish a detailed plan for how they it will run Libya after Gaddafi's departure, to avoid the kind of chaos unleashed in Iraq.
NATO last week decided to extend operations in Libya for another 90 days, or until the end of September.
"We are going to do this until we succeed ... If we need to roll it over again, we will," a U.S. official said in Brussels.
Rasmussen also said NATO had made "considerable progress".
"Gaddafi has lost his grip over much of the country ... and every day those closest to him are defecting. He is increasingly isolated at home and abroad," he said, adding that NATO had damaged or destroyed almost 1,800 legitimate military targets. (Additional reporting by Sherine El Madany in Benghazi, Hamid Ould Ahmed in Algiers, Justyna Pawlak in Brussels, Elizabeth Pineau in Paris and Tim Cocks in Tunis; Writing and additional reporting by John Irish in Rabat; Editing by Tim Cocks and Jon Hemming)