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* Pro-government fighters advance despite snipers, bombs
* Fall of city would deal major blow to Islamic State
* Rival eastern faction positioning troops nearby
By Ahmed Elumami
TRIPOLI, Oct 10 (Reuters) - Libyan pro-government forces are advancing into the last area controlled by Islamic State in the coastal city of Sirte, surrounding the militants after a five-month campaign backed by U.S. air strikes, military officials say.
At least eight pro-government fighters were killed over the weekend as their forces pushed into the 600 block, an area in central Sirte, with snipers and boobytraps posing the main obstacles to their advance, the officials said.
A Reuters reporter on the ground said forces advanced across two streets on Sunday, but were facing resistance and discovering explosive devices in many buildings.
Islamic State took over Sirte a year ago, exploiting the chaos and violence that have dogged Libya since the overthrow of leader Muammar Gaddafi in 2011 in order to carve out a new base, far from its main territory in Iraq and Syria.
Losing the city would be a major blow to the group, but officials believe some of its fighters and commanders escaped before Sirte was surrounded, and may continue to wage guerrilla-style attacks even after it falls.
The advance is being led by the Bonyan Marsous forces, mainly fighters from the city of Misrata, who are supporting a United Nations-backed unity government in Tripoli that is trying to bring together rival factions.
"The forces of Bonyan Marsous made some advances and completely trapped the 600 block area in Sirte," Misrata forces media official Ali Almabrouk said.
Mohamed Ghasri, a spokesman for pro-government forces, said two female jihadists had escaped with their three children and surrendered. They told Misrata forces they did not want to be used in suicide attacks, Ghasri said.
The fall of a major city to one of the country's most powerful factions is rekindling tensions with rival brigades in the east, led by Khalifa Haftar, who has rejected the authority of the U.N.-backed government in Tripoli.
In a major advance, Haftar has taken control of eastern oil ports and his troops have advanced close to Sirte. Many in the west of Libya believe Haftar is planning to establish himself as a military strongman like Gaddafi. His backers in the east see him as the only one who has fought for their interests, especially against Islamist militants. (Additional reporting by Hani Amara and Ismail Zitouny; Writing by Patrick Markey; Editing by Mark Trevelyan)