Abdel Fattah Younes |
General Abdel Fattah Younes was an ally of Col Gaddafi for many years.
NTC head Mustafa Abdul-Jalil said Gen Abdel Fattah Younes was killed by assailants, and the head of the group responsible had been arrested.
He said Gen Younes was summoned for questioning about military operations, but never made it to the meeting.
Reports said Gen Younes was suspected of ties to pro-Gaddafi forces.
Two aides to Gen Younes, Col Muhammad Khamis and Nasir al-Madhkur, were also killed in the attack, Mr Jalil said, adding that there would be three days of mourning in their honour.
The exact circumstances of the killings were unclear, and Mr Jalil did not say directly that the assailants were allied with Col Gaddafi.
Gen Younes is a former Libyan interior minister who defected to the rebel side in February. He was also part of the group that helped bring Col Gaddafi to power in 1969.
Some unconfirmed reports said Gen Younes and two aides had been arrested earlier on Thursday near Libya's eastern front.
Shortly after the announcement of Gen Younes' death, gunmen entered the grounds of the hotel in the eastern city of Benghazi where Mr Jalil was speaking, reportedly firing into the air before being convinced to leave.
Earlier on Thursday, rebels said they had seized the strategically important town of Ghazaya near the Tunisian border, after heavy fighting with Col Gaddafi's forces.
They reportedly took control of several other towns or villages in the area.
The rebels are struggling to break a military deadlock five months into the uprising against Col Gaddafi's rule.
Rebels control most of eastern Libya from their base in Benghazi and the western port city of Misrata, while Col Gaddafi retains much of the west, including the capital, Tripoli.
Late on Thursday AFP news agency reported explosions shaking the centre of Tripoli, as state TV reported that planes were flying over the Libyan capital.
Nato, acting under a UN mandate authorising military action for the protection of civilians, has carried out regular airstrikes in the Tripoli area.
Meanwhile, the South African ambassador to the UN, Baso Sangqu, warned that supporters of the rebels were in danger of violating UN sanctions.
His comments came a day after Britain granted the rebels diplomatic recognition and said it would unblock £91 million ($149m) in frozen Libyan oil assets for the rebels.
"We have noted the calls for Gaddafi must go," Mr Sangqu said. "We maintain that such statements do not bring us any closer to a political solution."
The BBC's Barbara Plett reports from the UN that the growing trend to grant diplomatic recognition to the Libyan rebels is facing opposition on the Security Council, and that moves to back the rebels will further polarise Council members.
Portugal has become the latest of about 30 countries to have recognised the NTC.
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