Beleaguered Haitian President Jean-Bertrand Aristide says rebels have attacked another city in the north and prospects for a settlement have faded after opponents rejected a power-sharing deal.
Mr Aristide, facing an armed revolt that capped months of political protests from the opposition, also warned that the violence could spark an exodus of boat people to the United States.
With insurgents controlling half of the impoverished Caribbean country of eight million people and vowing to march on the capital within days, civilians barricaded roads into Port-au-Prince with buses and old refrigerators.
Efforts to find a political solution stalled as opposition politicians rejected a power-sharing deal, already agreed by Mr Aristide, which US-led foreign mediators hoped could defuse the conflict. More than 60 people have died in clashes across the country so far.
Even had the opposition accepted the plan, it was not clear this would have halted the advance by the rebels, whose dozens of professional former soldiers pose a more serious threat.
Despite extending by a day a deadline for acceptance of its peace plan, Washington failed to move the opposition and was left hoping French pressure could change their minds.
US Secretary of State Colin Powell spoke to French Foreign Minister Dominique de Villepin to support his fresh mediation move.
Mr Aristide told a news conference in the presidential palace, "Last night criminals, terrorists and killers went to the northwest of the country, Port-de-Paix, and there they burned public and private houses, killing innocent people."
"We may have more Haitians leaving by boat to Florida," he said, apparently trying to touch on US fears of a repeat of the exodus in the early 1990s, when tens of thousands of Haitians fled political violence and tried to reach America.
Port-de-Paix, a city of about 100,000, is a traditional exit point for Haitians leaving for Florida by boat. Witnesses there said local rebels who seized control were celebrating in the streets, electricity and gas were in short supply and banks were unable to open.