Gen Younes defected to the rebels in February after serving in the Libyan leadership since the 1969 coup which brought Col Muammar Gaddafi to power.
Meanwhile Nato says it bombed Libyan state TV transmitters overnight.
The alliance said it disabled three satellite transmission dishes in the capital, Tripoli, through a "precision air strike".
It said the operation was intended to stop "inflammatory broadcasts" by Col Gaddafi's government.
Nato said the strike would "reduce the regime's ability to oppress civilians" but also "preserve television broadcast infrastructure that will be needed after the conflict".
Libyan state TV was still on air following the Nato statement.
'Slap in the face' Oil minister Tarhouni told reporters in Benghazi a leader of the militia had provided information on the circumstances of Younes' death.
Mr Tarhouni said Younes and two of his aides were killed after being recalled to the rebel stronghold for questioning.
Younes' shot and burned body, and the bodies of his aides, were found on the edge of Benghazi on Friday.
Abdel Fattah Younes
- Helped Libyan leader Col Muammar Gaddafi take power in the 1969 coup that ousted King Idris
- Close advisor to the Libyan leader for four decades, rising to the post of general and training Col Gaddafi's special forces
- Appointed interior minister
- Quit the government on 22 February 2011 and defected to the rebels - one of the earliest such moves by a senior official
- Appointed as the opposition's military chief in April, but faced mistrust due to his past ties to Col Gaddafi
Col Gaddafi's government said the killing was proof that the rebels were not capable of ruling Libya.
Government spokesman Moussa Ibrahim said: "It is a nice slap [in] the face of the British that the [rebel National Transitional] council that they recognised could not protect its own commander of the army."
Mr Ibrahim also said Younes was killed by al-Qaeda, repeating a claim that the group is the strongest force within the rebel movement.
"By this act, al-Qaeda wanted to mark out its presence and its influence in this region," he said.
"The other members of the National Transitional Council knew about it but could not react because they are terrified of al-Qaeda," he added.
Middle East analyst Shashank Joshi said the concern that emerges most sharply from the incident is not so much that the National Transitional Council will splinter before Tripoli falls, but that it might do so afterwards.
The general - Col Gaddafi's former interior minister - joined the rebels at the beginning of the Libyan uprising in February.
The BBC's Ian Pannell in the rebel-held city of Misrata says the death will feed international suspicions that the rebels cannot be trusted.