Thousands of Libyan rebel fighters have encircled the pro-Gadhafi stronghold of Bani Walid waiting for orders to attack as negotiations to resolve the standoff peacefully appeared to founder on Sunday.
Bani Walid, a city of 100,000 residents 90 miles southwest of Tripoli, stands as a first test of rebels’ ability to assert control over a large swath of central Libya still controlled by Col. Moamar Gadhafi’s loyalists and dominated by the three tribes that formed the backbone of his regime….