* Capital assumed to be Gaddafi's last stronghold
* Demonstrations follow Friday prayers
* Television stations report at least two dead
TRIPOLI, Feb 25 (Reuters) - Government forces shot dead protesters in the Libyan capital Tripoli on Friday, television stations reported, as unrest broke out across the city assumed to be the last stronghold of leader Muammar Gaddafi.
Witnesses described swirling clashes on the streets between security forces loyal to Gaddafi and crowds of protesters after Friday Muslim prayers.
Al Jazeera television said two people had been killed and several wounded in heavy shooting in several districts. Another channel, Al Arabiya, said seven people had been killed.
"I think Tripoli is in uprising," said one man in the centre of the city.
"When you go to (central) Green Square you find it full of Gaddafi supporters. In the other areas, they went out after Friday prayers and they are demonstrating against Gaddafi," he said.
"In some areas it was contained and in some other areas they are trying to disperse them. They were firing in the air to try to disperse them.
"It was in different areas of Tripoli ... We do not know what will happen. Some people say they (the protesters) will come to Green Square, some people say it has been dispersed."
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Ali, a businessman who declined to give his full name, told a Reuters correspondent in Benghazi by phone that a crowd had gathered in front of a mosque on a road leading to Green Square.
"They just started shooting people. People are being killed by snipers but I don't know how many are dead," he told Reuters.
But another witness said the protesters were advancing.
"There are more than 10,000 of us, too many to count, marching from the old American military base to Green Square," he said.
"LIBERATION DAY"
"This is Liberation Day. People are shouting 'The blood of the dead will not have been shed in vain' and 'we will sacrifice our souls. Gaddafi this is your final day'.
"There is no security along our path. They have fled like rats."
Hadar, a businessman who declined to give his full name, told Reuters in Benghazi by telephone that he had been among a group of young people protesting after Friday prayers in Tripoli when security forces opened fire.
"After the Friday prayers, the youth came out into the street and shouted 'Down with Gaddafi, Long live Libya!'. The security forces met us with live gunfire and teargas. I saw two men fall down and someone told me they were shot in the head."
Security forces tried to wrest back control of the strategic coastal town of Zawiyah, about 50 km (30 miles) west of the capital, but were driven back by government opponents, witnesses said.
"There are corpses everywhere ... It's a war in the true sense of the word," said Akila Jmaa, who crossed over into Tunisia on Friday after travelling from the town. (Writing by Christian Lowe; Editing by Andrew Roche)
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