Brega, Libya: Rebels strengthen their hold on the strategic oil installation at Brega on Thursday after repelling an attempt by loyalists of Muammar Gaddafi to retake it. International pressure on the Libyan leader increased as an international court began investigating whether to charge him and his inner circle with crimes against humanity.

Army units allied with the rebels fanned out in the oil facilities and port at Brega, armed with machine guns and rocket launchers. Government warplanes launched a new airstrike on the town in the morning, according to witnesses. It was not clear what they targeted, but it was likely an airstrip that belongs to the huge oil complex on the Mediterranean coast.

But there were no reports of casualties, and pro-Gaddafi forces had withdrawn to another oil port, Ras Lanouf, 80 miles (130km) west along the Mediterranean coast after their defeat a day earlier.

"We are in a position to control the area and we are deploying our forces," a rebel army officer in Brega said, speaking on condition of anonymity because he was not authorised to talk to the media.

In the opposition stronghold of Benghazi, east of the oil port, hundreds of mourners chanted ‘Down with Gaddafi’ as they buried three of the at least 14 rebel fighters killed in Wednesday's battle.

"Our message to Gaddafi is we are coming and we will make Libya free," said one man in the crowd, Sami Mosur. "He is a criminal we are coming from to him from Benghazi, we are coming from everywhere. He is a killer."

The fighting at Brega halted for now the regime's first counteroffensive on the opposition-held eastern half of the country. It also underlined the deadlock that Libya appears to have fallen into more than two weeks into its upheaval.

Gaddafi's forces seem unable to bring significant strength to dislodge rebels from the territory they hold. But the opposition does not have the capability to go on the offense against Gaddafi's strongholds in the west, including the capital.

Gaddafi's regime has unleashed the bloodiest crackdown of any Arab nation to the wave of anti-government protests in the region. Hundreds are known to have been killed, and some estimates top 1,000.

In the Netherlands, the top prosecutor at the Hague-based International Criminal Court (ICC) said on Thursday he would investigate Gaddafi and his inner circle, including some of his sons, for possible crimes against humanity in the violent crackdown on anti-government protesters.

Luis Moreno-Ocampo said Gaddafi and several commanders and regime officials had formal or de facto control over forces that attacked protesters. There will be "no impunity in Libya," he vowed. Besides Gaddafi, he specified the titles of seven others to be investigated, including the commander of the 32 battalion, the head of Gaddafi's personal security, the national security adviser and several other security chiefs. Gaddafi's son Khamis commands the elite 32nd battalion and another son, Muatassim, is the national security adviser.

Opposition leaders are pleading for foreign powers to launch airstrikes to help them oust Gaddafi as the United States moves military forces closer to Libyan shores to put military muscle behind Washington's calls for Gaddafi to give up power immediately.

But the Pentagon on Wednesday tried to play down the idea of using military force in Libya, including a ‘no-fly zone’ that Defence Secretary Robert Gates said would first require attacking Gaddafi's government.

"Let's just call a spade a spade: A no-fly zone begins with an attack on Libya to destroy the air defenses," Gates told lawmakers. He added that the operation would require more warplanes than are on a single US aircraft carrier.

Italy's foreign minister on Thursday ruled out any military action by his country, citing Italy's history as a colonial occupier of Libya.

Gaddafi on Wednesday warned the US and other Western powers not to intervene. ‘Thousands of Libyans will die’ if the West does so. "We will distribute arms to 2 or 3 millions and we will turn Libya into another Vietnam." He warned that any foreign troops coming into Libya ‘will be entering hell and they will drown in blood.’

There have been stirrings of a diplomatic effort. Gaddafi's ally Venezuelan President Hugo Chavez proposed that his country and a bloc of ‘friendly’ nations mediate between the Libyan leader and the opposition.

Oil prices eased below $102 a barrel on Thursday on profit taking and hopes that the conflict in Libya might be resolved by international mediation.

But so far there's been no response from Gaddafi or the rebels to the mediation idea. The head of the Cairo-based Arab League - also contacted by Chavez on the proposal - seemed cool on the offer. League spokesman, Hisham Youssef, said the idea was still not clearly drawn out and added that any mediation must ‘take into consideration the aspirations of the Libyan people’ - an apparent reference to those who joined the uprising.

At Brega, army units that have joined the opposition moved in to keep security after Wednesday's battle, waged by citizen militias from nearby towns and cities. Despite having little central organisation or command, the rag-tag anti-Gaddafi fighters - armed with automatic weapons and some heavy machine guns and rocket launchers - was able to repel a force of several hundred regime troops that attacked after dawn.

Farj Lashrash, a soldier with the opposition, said the rebel fighters had captured 10 pro-Gaddafi soldiers since last night.

The troops came in from the opposition stronghold of Benghazi, 140 miles (220km) northeast of Brega. Dozens of the rebel forces, armed with Kalashnikov rifles and dressed in camouflage army uniforms with checkered keffiyehs around their necks or heads fanned out around Brega, which has a port, airstrip, oil installation and a small town. They were backed by at least a dozen pickup trucks with machine-guns bolted onto their beds or rocket launchers in tow.

There was no sign of any pro-Gaddafi forces around Brega. Aside from the airstrike, the area was calm. No casualties from the airstrike were reported, but a few rebel fighters were rushed to the hospital with wounds after a mortar they were handling exploded.

In the nearby rebel-held town of Ajdabiya, which sent fighters to the battle, morgue officials said the death toll from the Brega fighting rose to 14 from at least 10 a day earlier. The western gate of the town was reinforced with heavy weaponry as defence against any attack - including a tank, four anti-aircraft guns mounted on pickup trucks and four rocket launchers.

Brega is the second-largest petroleum and natural gas facility in OPEC-member Libya and has been held by the opposition since last week.

Amid the chaos sweeping the country, exports from the country with Africa's largest proven oil reserves have all but stopped. Crude production in the southeastern oil fields that feed the facility at Brega has been scaled back because storage facilities there are filling up.

The uprising has sent world oil prices spiking to the highest levels in more than two years, above $100 per barrel. Overall, Libyan crude production has dropped from 1.6 million barrels per day, nearly 2 per cent of world consumption, to as little as 600,000 barrels per day.

"In the last 24 hours, we had a bit of a panic here," oil company employee Osman Rajab said. "Now they (the rebel army) are trying to control the industrial areas," he said, referring to the oil complex.”

At the edge of Brega's massive oil facility, the rebel army set up a line of defense, with soldiers, four pickup trucks mounted with machine guns and one truck towing a rocket launcher.

For the past week, pro-Gaddafi forces have been focusing on the west, securing Tripoli and trying to take back nearby rebel-held cities. But the regime has seemed to struggle to bring an overwhelming force to bear against cities largely defended by local residents using weapons looted from storehouses and backed by allied army units.

Pro-Gaddafi forces succeeded over the weekend in retaking two small towns. But the major western rebel-held cities of Zawiya and Misrata, near Tripoli, have repelled repeated, major attacks — including new forays against Zawiya on Wednesday.

Zawiya was quiet Thursday, and residents have set up defenses at the city entrances, said resident Alaa al-Zawi, an opposition activist. "Our information is that there is a big (pro-Gaddafi) force amassed on the eastern side of the city," he said. "There might be an attack but we are ready to repulse it."

He said the city has enough food and water to last up to six months, though the worry is lack of medicine if fighting resumes.

The turmoil in Libya has set off a massive exodus of 180,000 people - mostly foreign workers in Libya - who have fled to the borders, UN refugee agency spokeswoman Melissa Fleming said.