Libya's Bani Walid is shelled in standoff over rebel's death TRIPOLI (Reuters) - Shelling by Libyan pro-government forces has killed three people including a child in the former Gaddafi stronghold of Bani Walid, a local militia leader said on Tuesday. The hilltop town was one of the last to surrender last year to the rebels who overthrew Muammar Gaddafi. It has come back into focus with the death two weeks ago of rebel fighter Omran Shaban after two months of detention in Bani Walid. Shaban, from nearby Misrata, was the man who found Gaddafi hiding in a drain. Libya's embryonic parliament, the national congress, had ordered the defense and interior ministries to find those who abducted Shaban and were suspected of torturing him to death, and given Bani Walid's militias until last Friday to hand them over. While the threat of a direct assault on the town appeared to have been postponed, militias operating alongside the Defence Ministry, notably from Misrata, took up positions on the outskirts. Colonel Salem al-Wa'er, a spokesman for Bani Walid's fighters, said shelling was coming from the area of al-Mardum, about 25 km (15 miles) along the road to Misrata. "A little girl died in the shelling by tank rounds and seven others are in the hospital injured," he said by phone from inside Bani Walid, adding that his fighters were returning fire. He later said two more people had been killed. A Misrata hospital official told Reuters that nine fighters from Misrata had been injured in counterattacks from Bani Walid. The tensions between Misrata and Bani Walid underline the challenge Libya's new rulers face in reconciling groups with long-running grievances and embracing those who chose not to back the revolt - whether out of fear, or because they supported Gaddafi or benefited from his rule. While Misrata spent weeks under siege by Gaddafi's forces during last year's fighting, Bani Walid, 140 km (90 miles) away, was one of those that remained loyal to Gaddafi longest. The town of around 70,000 people remains isolated from the rest of Libya and former rebels say it still harbors pockets of support for the old regime. With the police and courts weak, and guns readily available, Libyans have been settling their own scores since the revolution and clashes have been frequent between former rebels and clans that backed Gaddafi or stayed on the sidelines. Writing by Hadeel al-Shalchi; Editing by Kevin Liffey