Forces loyal to Muammar Gaddafi launched a major fightback in Libya's East on Wednesday, sparking a rebel warning that foreign military help might be needed to 'put the nail in his coffin' and end his long rule.
Government troops briefly captured Marsa El Brega, an oil export terminal, before being driven back by rebels who have controlled the town 800 km (500 miles) east of the capital Tripoli for about a week, rebel officers said.
Their account was contradicted by Libyan state TV, which said Gaddafi's forces held the airport and seaport, and the veteran leader told an applauding audience the world did not understand that he had given power to the people long ago.
"We put our fingers in the eyes of those who doubt that Libya is ruled by anyone other than its people," he said at a Tripoli gathering televised live on Libyan television, referring to his system of "direct democracy" launched in 1977.
The assault appeared to be the most significant military operation by Gaddafi since the uprising began two weeks ago and set off a confrontation that Washington says could descend into a long civil war unless the veteran strongman steps down.
But analysts cautioned against drawing firm conclusions from fast moving events in a situation of erratic communications.
"The attack reinforces the idea that the government is capable of projecting power far into the east," said Shashank Joshi, an analyst at Britain's Royal United Services Institute.
"But we should keep in mind that both the government and the rebels are trying to spin an image of momentum.
"Bear in mind that in the area around Tripoli, where the government has more forces to draw on, we see government offensives still being blunted quite easily."
The rebels said they would probably seek foreign military help, a sensitive topic for Western countries uncomfortably aware that Iraq suffered years of bloodletting and al Qaeda violence after a 2003 U.S.-led invasion toppled Saddam Hussein.
"We are probably going to call for foreign help, probably air strikes at strategic locations that will put the nail in his (Gaddafi's) coffin," Mustafa Gheriani, a spokesman for the rebel February 17th Coalition, told Reuters.
"They tried to take Brega this morning, but they failed. It is back in the hands of the revolutionaries. He (Gaddafi) is trying to create all kinds of psychological warfare to keep these cities on edge," he said.
There are fears that the uprising, the bloodiest yet against long-serving rulers in the Middle East, is causing a major humanitarian crisis, especially on the Tunisian border where thousands of foreign workers are trying to flee to safety.
Gaddafi is defiant and his son, Saif al-Islam, has warned the West against launching military action. He said the veteran ruler would not relinquish power or be driven into exile.
The Libyan leader might do something "desperate" to defend his regime, Italy's industry minister said.
"There is a possibility, indeed a real possibility, that Gaddafi might make a desperate last-ditch attempt to free himself from the siege that he finds himself in," said Paolo Romani on Italian television.
Across Libya, tribal leaders, officials, military officers and army units have defected to the rebel cause and say they are becoming more organized. Tripoli is a stronghold for Gaddafi in this oil-producing north African state.
"We are going to keep the pressure on Gaddafi until he steps down and allows the people of Libya to express themselves freely and determine their own future," Susan Rice, the U.S. ambassador to the United Nations, told ABC's "Good Morning America."
Captain Faris Zwei, among officers in the east who joined the opposition to Gaddafi, said there were more than 10,000 volunteers in Ajdabiyah, a short distance from Marsa El Brega.
"We are reorganizing the army, which was almost completely destroyed by Gaddafi and his gang before they left," he said. "We are reforming, as much as we can, the army from the youth that took part in the revolution."
Two amphibious assault ships, USS Kearsarge, which can carry 2,000 Marines, and USS Ponce, entered the Suez Canal on Wednesday en route to the Mediterranean. The destroyer USS Barry moved through the canal on Monday as part of efforts to increase diplomatic and military pressure on Gaddafi to quit.
The two ships entered through the southern end of the canal, an official said, adding that they were expected to pass through by 3:30 p.m. (1330 GMT) or 4:00 p.m. local time.
ARAB LEAGUE POISED TO REJECT FOREIGN MILITARY ROLE
Arab League foreign ministers will meet on Wednesday in Cairo to discuss a draft resolution rejecting foreign military intervention in Libya, the deputy secretary general of the league said.
The repositioning of U.S. ships and aircraft closer to Libya is widely seen as a symbolic show of force since neither the United States nor its NATO allies have shown any appetite for direct military intervention in the turmoil that has seen Gaddafi lose control of large swaths of his country.
"We are looking at a lot of options and contingencies. No decisions have been made on any other actions," Defense Secretary Robert Gates said, noting the United Nations had not authorized the use of force in Libya.
Italy said it was sending a humanitarian mission to Tunisia to provide food and medical aid to as many as 10,000 people who had fled violence in Libya on its eastern border.
The White House said the ships were being redeployed in preparation for possible humanitarian efforts but stressed it "was not taking any options off the table."
Gates said: "Our job is to give the president the broadest possible decision space."
British Prime Minister David Cameron, who said Britain would work with allies on preparations for a no-fly zone over Libya, said it was unacceptable that "Colonel Gaddafi can be murdering his own people using airplanes and helicopter gunships."
AFRICANS, ASIANS DESPERATE TO LEAVE LIBYA
General James Mattis, commander of U.S. Central Command, told a Senate hearing that imposing a no-fly zone would be a "challenging" operation. "You would have to remove air defense capability in order to establish a no-fly zone, so no illusions here," he said. "It would be a military operation."
At Ras Jdir on the Tunisia border, thousands of Bangladheshi migrant workers, desperate to leave Libya, pressed up against the gates of the frontier crossing, angry at their government for sending no help.
Groups of West African migrant workers also in the crowd chanted for help and held up the flags of Ghana and Nigeria.
About 70,000 people have passed through the Ras Jdir border post in the past two weeks, and many more of the hundreds of thousands of foreign workers in Libya are expected to follow.