Libyan leader Muammar Gaddafi stood firm on Wednesday, accusing the West of plotting to seize his country's oil and the insurgents of being traitors backed by Al Qaeda, as his forces pounded rebel-held areas.

"The colonialist countries are hatching a plot to humiliate the Libyan people, reduce them to slavery and control the oil," he said on state television.

Gaddafi addressed his remarks to the people of Zintan, 120 kilometres (75 miles) Southwest of Tripoli, which is in rebel hands but surrounded by his own troops.

He again said Al Qaeda was behind the insurrection that began on February 15 and called on the inhabitants of Benghazi, the rebels' main base, to "liberate" the Eastern city.

Gaddafi made similar accusations against Western countries, especially France, in an interview aired by the French LCI television channel on Wednesday.

He had made a late-night appearance at a hotel used by many foreign correspondents in the Libyan capital.

Britain and France have made the most aggressive calls among Western powers for a no-fly zone to stop Gaddafi’s troops attacking opposition forces, and a senior UN official in New York said the security council had discussed the matter.

The United States says any such move would need to have full United Nations backing, which is far from assured.

Paris has also praised the national council set up by the rebels, two of whose members addressed the European Union's parliament on Tuesday asking for world recognition and a no-fly zone.

US President Barack Obama and British Prime Minister David Cameron said they would plan a "full spectrum" of action against Gaddafi while US officials met with opposition members seeking to topple the veteran leader.

On the front line, lightly-armed rebel fighters came up against fierce shelling and air attacks as they tried to advance in the East, while in the Western rebel-held town of Zawiyah a former official said Gaddafi’s forces had launched a "final onslaught" and the situation was very critical.

The rebels' goal of marching to Tripoli has stalled since the weekend when they failed to get past Bin Jawad, a hamlet 30 kilometres (19 miles) west of the oil port of Ras Lanuf, and numbers at the front appear to have decreased.

From Zawiyah, just west of Tripoli, Murad Hemayma said Gaddafi wanted to take control of the city by Wednesday after days of siege which has seen many civilian casualties.

"Round every corner there are people shooting," he said. "The international community must do something."

As pressure grew from inside Libya and elsewhere in the Arab world for a no-fly zone, the White House said Obama and Cameron agreed to press forward with planning, including at Nato, on a range of possible responses.

Measures under consideration included surveillance, humanitarian assistance, enforcement of the arms embargo and a no-fly zone, the White House said.

Cameron said the world could not stand aside while Gaddafi did "terrible things" to the Libyan people. "We have got to prepare for what we might have to do if he goes on brutalising his own people," he added.

Washington has been markedly less enthusiastic about the possibility of enforcing a no-fly zone than some of its allies, with officials noting that it would likely require taking on Libya's air defences.

"I think it's very important that it's not a US-led effort because this comes from the people of Libya themselves," US secretary of state Hillary Clinton told Sky News. "We think it is important that the United Nations make that decision."

In Cairo, US ambassador to Libya Gene Cretz and other US officials met members of the opposition seeking to topple Gaddafi, the state department said, declining to identify them.

"We are engaging a wide range of leaders, and those who both understand and can potentially influence events in Libya," state department spokesman Philip Crowley said.

Crowley said Washington had been in contact with opposition members inside and outside the national council.

On the oil markets prices fell back again on Wednesday as producer countries showed signs of increasing output to counter the effects of turmoil in the West Asia and North Africa, analysts said.

New York's main contract, light sweet crude for delivery in April, shed 67 cents to $104.35 per barrel in Asian trading while Brent North Sea crude fell 76 cents to $112.30.

Saudi Arabia, the world's largest oil supplier, pledged to meet any needs, but analysts still warned that crude prices could reach record highs above $200 a barrel.

Foreigners fleeing the violence are still crossing from Libya into Tunisia, though UN high commissioner for Refugees Antonio Gutteres said on Tuesday they had been cut to fewer than 2,000 people a day because of effective supervision by the Libyan authorities.

Guterres visited the Tunisian side of the border with William Swing, director general of the International Organisation for Migration (IOM), spending an hour at a packed transit camp.

He paid homage to the "extreme generosity of the Tunisian people" and interim government set up following the January ouster of President Zine El Abidine Ben Ali.

"The Tunisians who are themselves living a period of transition, who have serious economic problems, have opened their frontier, their hearts, their houses and taken in more than 110,000 people, guaranteeing them protection and help," he said.

Elsewhere in the volatile region, a Yemeni died of gunshot wounds on Wednesday after being hit when the police opened fire overnight on anti-regime demonstrators in Sanaa, a medical official said.

The protester was wounded with three others when the police fired live bullets and tear gas to disperse the students' demonstration outside Sanaa University late Tuesday.