Two people were killed when a rocket hit a camp for displaced people in Libya's capital on Sunday as fighting between rival armed groups continued to rage, an activist said.

On Saturday, rockets hit a hotel in central Tripoli and a fuel depot south of the capital, the focus of one week of heavy fighting between different armed groups.

The missile fell on the al-Fallah camp for displaced Tawergha people, killing two and wounding seven, including two children, said Emad Ergeha, an activist following Tawergha issues.

The Tawergha were forced to leave their settlement near the western city of Misrata in the NATO-backed uprising that toppled Muammar Gaddafi in 2011 and have been prevented from going back since.

Ergeha, a Tawergha himself, also posted a video of fire fighters extinguishing a fire and showing severe damage to steel-made containers in the camp.

A rocket also hit the Waddan hotel in central Tripoli near the Italian embassy. Three people were wounded, staff said.

State oil firm NOC confirmed one of its diesel depots used to supply a power station had been hit by a rocket.

Fierce clashes erupted last week between the Seventh Brigade, or Kaniyat, from Tarhouna, a town 65 km (40 miles) southeast of Tripoli, against the Tripoli Revolutionaries' Brigades (TRB) and the Nawasi, two of the capital's largest armed groups.

The U.N.-backed government based in Tripoli declared a state of emergency in the capital "given the seriousness of the current situation."

Although the government is formally in charge, it does not control the capital where armed groups are allied to it but operate with autonomy, often motivated by money and power.