An explosion damaged a hotel used by rebels and foreigners in Libya's rebel-controlled eastern city of Benghazi on Wednesday, wounding one person, police said.
The hotel has been used for rebel news conferences, and the National Transitional Council, which is fighting to topple Libyan leader Muammar Gaddafi, has offices there.
Many journalists are also staying at the hotel which overlooks the sea in central Benghazi.
A Reuters witness at the scene saw two fire brigade vehicles, an ambulance and a tow truck dragging away a burnt vehicle. Security had also been stepped up around the hotel.
Nasser El Haram, a police officer, told Reuters the rebel authorities believed the explosion might be linked to Gaddafi agents still operating in rebel-controlled eastern areas.
"It could be the remnants of Gaddafi's regime because the Tibesti hotel is the symbol of the revolution," he said.
Abdel Hafiz Ghoga, vice chairman of the National Transitional Council, told Reuters the explosion was believed to have been caused by a hand grenade thrown from a distance.
"Four cars exploded as a result of the hand grenade. The investigation is under way until we find out the type of bomb," he said.
Ghoga described the explosion as a "desperate attempt" by Gaddafi's loyalists to instil terror.
"People know that these attempts are targetted against their freedom but on the contrary, these attempts speed up the revolution and its success," said Ghoga.
"This is evidence that Gaddafi's regime is running out of options. The chains are tightening around him."
Thousands took to the streets soon after the incident, blocking roads in several districts.
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