The United Nations' special envoy for Libya is meeting representatives of both sides of the conflict.
It comes days after rebels made a significant advance that brought them within 30 miles of Muammar Gaddafi's stronghold in the capital Tripoli.
Abdel-Elah al-Khatib, Jordan's former foreign minister, arrived in the Tunisian capital Tunis on Sunday for the meetings with representatives of Gaddafi and the rebels. He said there were no direct negotiations as he met the two sides separately in the neighbouring country.
A Tunisian security official said the discussions centred on a "peaceful transition" in Libya. The official said the rebels reacted angrily to the proposal with one member of their delegation throwing a shoe during the meeting to show his deep disdain.
In Libya, a rebel advance over the weekend into the strategic city of Zawiya on the Mediterranean coast, just 30 miles from Tripoli, put the opposition force in the strongest position to attack the capital since the 6-month civil war began.
In a sign of the regime's growing distress, US defence officials said Libyan government forces tapped into their stores of Scud missiles this weekend, firing one for the first time. The missile was fired toward a second front line in the east of the country around the town of Brega and nobody was hurt.
Rebels and Gaddafi forces have been fighting for control of Zawiya on a main road leading from Tunisia to Tripoli. Rebels are trying to cut off two major supply routes into the capital from Tunisia and another in the south. They said on Sunday they had cut oil pipelines from Zawiya to Tripoli. Oil-rich Libya's only functioning refineries are in Zawiya.
Medics at a field hospital on the outskirts of Zawiya said 15 people have been killed in an artillery strike, including a woman and child.
On the second front in the east, Nato planes could be heard over Brega as rebels patrolled the ghost town. Furniture and clothing were strewn all over the residential compound, and many houses were broken into, their windows shattered and walls pocked with bullet holes.
The UN denied its special envoy was taking part in the meetings. In a statement, it said it had "no concrete information about talks supposedly taking place in Tunisia".