Islamist fighters including Ansar al-Sharia were blamed for the killings at a U.S. diplomatic compound in 2012.
Public demonstrations, a Libyan military strongman and defections to ISIS have all damaged Ansar al-Sharia's standing in Libya.
Pro-government fighters rescued two Turks, two Indians and one Bangladeshi.
The radical Islamists have lost a town east of Sirte as pro-government forces advance from the west.
Amid the celebrations in Derna, schools are reopening and people are returning to work.
The internationally recognized parliament in Tobruk and the rival parliament in Tripoli meet to discuss unity plan.
Libya is caught in a war between its internationally recognized government and an unofficial one controlling Tripoli.
Ansar al-Sharia's spiritual leader defects to ISIS in bid to influence fellow North African jihadis.
Islamist militants have made inroads into parts of the North African oil-producing country.
The army reportedly has retaken nearly all of Benghazi from the extremist group Ansar al-Sharia.
Images released on social media show a convoy of 4x4s flying jihadist flags in Benghazi.