* Signs of heavy battle at town's entrance
* Army barracks mangled by air strikes
* Residents searching for more bodies
(Recasts, adds detail throughout)
By Angus MacSwan
AJDABIYAH, Libya, March 26 (Reuters) - Libyan rebels danced on wrecked government tanks and handed out bread and water to residents on Saturday after retaking Ajdabiyah, a gateway to the east that has been left a ghost town by days of fighting.
Decomposing bodies of more than a dozen fighters loyal to Libyan leader Muammar Gaddafi and ruins of artillery at entrances to the town showed that fighting had been fierce.
But in the town centre there was little sign of destruction and the few inhabitants who had not fled began emerging from bullet-riddled buildings.
Shops were closed and streets were mostly deserted as jubilant rebels roamed in pick-up trucks and fired into the air.
One rebel shouted: "Thank you Britain, thank you France, thank you America," referring to air strikes carried out by allied countries under a U.N.-mandated no-fly zone.
Fighter Sarhag Agouri said the fighting had lasted all night. "Ajdabiyah is a ghost town. Now there are only dead bodies and families who don't know what to do," he said.
A hospital official said it was difficult to know how many people had been killed as residents were looking for bodies outside the town.
Ahmed Mohammed, a 21-year-old student, said he heard fighting from 1600 GMT (6 p.m.) on Friday until 0000 GMT (2 a.m.). He and his family had not been able to leave Ajdabiyah.
"We couldn't get away. It was very difficult. We only had a little to eat," said Mohammed.
He said Gaddafi's security forces had taken people from their houses.
Capturing Ajdabiyah, a gateway from western Libya to the rebel stronghold of Benghazi, was a big morale boost for rebels, who have struggled to break a battlefield stalemate in their campaign to end Gaddafi's four-decade rule in the oil-producing north African country.
BATTLE DEBRIS
The debris of the battle was scattered around the eastern gate. A Reuters correspondent saw four destroyed Gaddafi tanks, ammunition boxes, empty shell cases and boxes strewn over the sand dunes. There was a strong smell of burning.
On the western side, an army barracks was pulverised, apparently by western air strikes.
Stocks of ammunition and weapons, including rocket-propelled grenades, lay abandoned -- some intact, others destroyed. Some boxes of ammunition had Russian characters, others were in English.
The walls of one building had been completely demolished and some rebel fighters picked over the debris to be joined by some looters and residents.
Officials said they would reopen the local hospital, which had been shut down because of fears that staff were on a Gaddafi hit list.
Giuma Mohammed, chief of the health committee at the hospital, said he had fled Ajdabiyah but returned to open it on Saturday morning.
Asked how many people had been killed, Mohammed said: "Nobody knows. People are looking for bodies outside of town as well." (Writing by Ibon Villelabeitia in Cairo; editing by Elizabeth Piper)
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