"Our medical team came through the village and they tell us it is free," Sultan told AFP.
The capture of Qasr Abu Hadi, where Kadhafi was reportedly born in a nomad tent in 1942 when it was still a tiny desert hamlet, is the latest in a string of loyalist communities to be mopped up by National Transitional Council troops as they close in on the toppled despot's diehard fighters inside Sirte.
Sultan said two NTC fighters were killed in front-line fighting in another part of eastern Sirte on Monday, and six were wounded.
Misrata military council spokesman Adel Ibrahim said three fighters were killed and 31 wounded in fighting on the southern edges of the city.
Qasr Abu Hadi prospered under the rule of its most famous son and the surrounding countryside is dotted with large villas in gated compounds.
Most were empty; their occupants fled. But some housed large numbers of families huddled together for safety amid evident fear of retribution from the victorious NTC forces.
Most residents refused to speak to AFP and those who did were clearly afraid.
"We are caught in the crossfire. Kadhafi's men hide in our farms and rebels fire shells from the other side," one man told AFP, declining to give his name.
"Two days ago, five members of a family in a house next to mine were killed when a rocket struck it. We don't know who fired that rocket," said the man, dressed in a traditional dishdasha.
He said he had 30 families hiding in his large villa but would not allow AFP in.
"They all are scared. There are many children too with them and they have no milk or food. I only have bread and tea to offer to them."
NTC fighters said some of the villas had been used as arms caches by Kadhafi loyalists.
An International Committee of the Red Cross team tried to deliver desperately needed medical supplies to the Ibn Sina hospital in the centre of Sirte but was forced to turn back when a firefight erupted on the front line to the west, preventing it from crossing over.
NTC commanders, who were strongly criticised for launching an attack on Kadhafi forces in a nearby conference centre while the ICRC was making a delivery to the same hospital on Saturday, insisted they were only returning fire.
"We didn't launch an attack. We were returning fire," operations commander Osama Sehli Muttawa said, adding that the NTC troops had come under bombardment from Kadhafi forces using rocket-propelled grenades and 107mm rockets.
"The hospitals are full of armed individuals, there are also operations rooms inside because they know we won't hit the hospitals," he told AFP.
"They fire from the hospitals, from the university. They don't stick to any code of conduct. We will."
The ICRC team was trying to deliver two truckloads of medical supplies, including oxygen and hygiene kits, as well as nappies, rice, pasta, cooking oil and tinned tomatoes.
Hundreds of Sirte residents have been fleeing in packed vehicles, with some sitting on top of possessions piled high in the rear of pick-ups.
On the political front, the NTC announced minor changes to the line-up of its executive, at a news conference in the eastern city of Benghazi.
NTC chief Mustafa Abdel Jalil told reporters the post of deputy head of the executive, until now held by Ali Essawy, was being scrapped while Ahmed Kissa was named to head the new post of minister for Libyans killed or wounded.
Hamza Abu Fas was to replace Salem al-Sheiky as minister of Islamic affairs, he added.
Abdel Jalil said the current head of the executive, Mahmud Jibril, would retain his position as well as the post of foreign minister.
"We appeal to the Libyan people to be patient because the hour of liberation is near," Abdel Jalil said.
The NTC, which has been ruling Libya since Kadhafi was toppled in a revolt in August, has postponed forming a transitional government until the last bastions of support for the strongman are overrun.
In Brussels, NATO's chief called on the new Libyan regime to secure stockpiles of weapons amassed by Kadhafi that could fall into the wrong hands.
Secretary General Anders Fogh Rasmussen refused to confirm reports that thousands of surface-to-air missiles were on the loose in Libya, but said it was up to the NTC to keep weapons secured.
"In general, all weapons that end up in the hands of people with bad intentions is a big problem," he told reporters ahead of a meeting of NATO defence ministers on Wednesday and Thursday.