Tripoli: Moammar Gaddafi's regime accused the West of 'a conspiracy to divide Libya' as Washington, under mounting pressure to help opposition forces, said it was premature to arm the rebels.
Fresh fighting was reported in the city of Zawiyah just outside the Gaddafi-held capital Tripoli, while Gulf states including Saudi Arabia backed efforts to impose a no-fly zone over the oil-rich north African country.
In Tripoli, Libya's foreign minister told reporters that the West was trying to split the country by secretly building up contacts with rebel leaders.
"It is clear that France, Great Britain and the US are now getting in touch with defectors in eastern Libya. It means there is a conspiracy to divide Libya," said the minister, Mussa Kussa.
His comments came after British Foreign Secretary William Hague admitted a 'serious misunderstanding' led to the seizing of a special forces team in a bungled mission to contact Libyan rebels.
The United States, facing rising pressure at home and abroad to do more to protect civilians and hasten Gaddafi's exit from power, appeared to be wary of throwing weapons into a conflict involving groups about which it knows little.
While the White House said it was considering arming the rebels, it insisted that such a move would be premature and Defense Secretary Robert Gates warned that intervention would likely require international approval.
"It would be premature to send a bunch of weapons to a post office box in eastern Libya, we need to not get ahead of ourselves," White House spokesman Jay Carney said.
On the ground, Libyan opposition groups and media reported tank fire and fierce battles between rebels and Gaddafi loyalists in the city of Zawiyah, a flashpoint 60 kilometres (40 miles) west of Tripoli.
The rebels began pulling back from the key oil port of Ras Lanuf as fighter jets targeted defences on the edge of town, throwing up palls of smoke amid fears that government forces were gearing for an attack.
One air strike wounded a father and a son when a jet bombed their car on the road outside the town, medics and a reporter said.
Salim Hussein Attia, 47, a manager at the Ras Lanuf oil plant, told that he had been taking his family east to shelter with relatives after government forces captured the nearby hamlet of Bin Jawad.
"We were driving past the petrol station when suddenly we were hit by a big explosion. Thank God my family are all fine. My son Ahmed has just a few stitches," he said.
After the bloodiest fighting of the three-week-old conflict on Sunday, the United Nations demanded urgent access to scores of 'injured and dying' in the western city of Misrata.
A doctor in Misrata said 21 people, including a child, had been killed in shelling and clashes there on Sunday, and 91 people wounded, the 'overwhelming majority' of them civilians.
NATO head Anders Fogh Rasmussen said such attacks could amount to crimes against humanity.
He said the 'outrageous' response of Gaddafi's regime to protests had created 'a human crisis on our doorstep which concerns us all' and reiterated his strongest condemnation.
"I can't imagine the international community and the UN standing idly by if Colonel Gaddafi and his regime continue to attack his own people systematically," Rasmussen added.
At the United Nations, Secretary General Ban Ki-moon named former Jordanian foreign minister Abdul Ilah Khatib as his special envoy to deal with the regime on the humanitarian front.
Ban's office said he noted that 'civilians are bearing the brunt of the violence, and calls for an immediate halt to the government's disproportionate use of force and indiscriminate attacks on civilian targets'.
Khatib, 56, will leave for New York 'in the next few days before travelling to Libya, where he should meet with all parties involved in the conflict', an associate of the former minister told in Amman.
The UN called for $160 million (114 million euros) to cover relief support including shelter, food and sanitation for refugees as well as others who remain trapped by the fighting.
With the fighting getting worse and population centres threatened, British and French attempts to have a no-fly zone imposed over Libya received a boost as the six nations of the Gulf Cooperation Council announced their support.
The GCC - including nations such as Bahrain and Oman shaken by their own anti-government protests - urged the "UN Security Council take all necessary measures to protect civilians, including enforcing a no-fly zone over Libya".
But veto-wielding UN Security Council permanent member Russia signalled its opposition, with Foreign Minister Sergei Lavrov saying "the Libyans must resolve their problems themselves".
Bahrain meanwhile announced plans to build 50,000 homes at a cost of at least two billion dinars ($5.32 billion), in the government's latest response to the protests gripping the kingdom, home to the US Navy's Fifth Fleet.
The regional unrest has sent oil to two-and-a-half-year highs, but prices slipped on Tuesday after the United States refused to rule out tapping its oil reserves to ease the impact on the economy.
New York's main contract, light sweet crude for delivery in April, fell 41 cents to $105.03 per barrel in early Asian trade on Tuesday while Brent North Sea crude for April delivery shed 13 cents to $114.91.