Muammar Gadafy's better armed and organised troops reversed the westward charge of rebels today as world powers meeting in London piled pressure on the Libyan leader to step down.
A conference of 40 governments and international bodies agreed to press on with a Nato-led aerial bombardment of Libyan forces until Col Gadafy complied with a UN resolution to end violence against civilians.
It also set up a contact group comprising 20 countries and organisations, including Arab states, the African Union and the Arab League, to coordinate international support for an orderly transition to democracy in Libya.
"All of us must continue to increase the pressure on and deepen the isolation of the Gadafy regime through other means as well," US secretary of state Hillary Clinton said after the London talks finished.
"This includes a unified front of political and diplomatic pressure that makes clear to Gadafy that he must go."
The United States, Britain and Qatar suggested that Col Gadafy and his family could be allowed to go into exile if they took up the offer quickly to end six weeks of bloodshed.
Washington and Paris also raised the possibility of arming the rebels, although both stressed no decision had been taken.
Without the help of air strikes, the rebels seem unable to make advances or even hold positions, and on the ground the pendulum of fighting swung back Col Gadafy's way.
It took five days of foreign air strikes to pulverise Libyan government tanks around the town of Ajdabiyah before Col Gadafy's troops fled and the rebels rushed in and began a 300km, two-day dash across the desert to within 80km of the Col Gadafy loyalist stronghold of Sirte.
But the rebel pick-up truck cavalcade was first ambushed, then outflanked by Col Gadafy troops. Government forces retook the small town of Nawfaliyah, 120km east of Sirte, and rebels said they had been pushed back a further 25km to the outskirts of the larger Bin Jawad.
"The Gadafy guys hit us with Grads (rockets) and they came round our flanks," Ashraf Mohammed, a 28-year-old rebel wearing a bandolier of bullets, told a Reuters reporter at the front.
The sporadic thud of heavy weapons could be heard as dozens of civilian cars sped eastwards away from the fight.
Later, a hail of machinegun and rocket fire hit rebel positions. As the onslaught began, rebels leapt behind sand dunes to fire back. After a few minutes they gave up, jumped into their pick-up trucks and sped off back towards Bin Jawad.
Reports that some Nawfaliyah residents fought alongside government troops were an ominous sign for world powers hoping to end Col Gadafy's rule without a descent into all-out civil war.
In western Libya, rebels and forces loyal to Col Gadafy both claimed control over parts of Misrata, Libya's third city, which has been besieged by government forces for more than a month.
Libyan state television said thousands of people were taking part in a march in support of Col Gadafy in Misrata, which it said had been "cleansed of armed terrorist gangs." It was the third time the channel said Misrata had been recaptured from rebels.
A rebel spokesman called Sami said Col Gadafy's forces had tried to enter the town from the east.
"Fighting is still taking place now. Random bombardment is continuing," he told Reuters by telephone from the city.
"The humanitarian situation is catastrophic. There is a shortage of food and medicine. The hospital is no longer able to deal with the situation."
Aid agencies are increasingly worried about a lack of food and medicines, especially in towns such as Misrata where a siege by Col Gadafy's forces deprives them of access.
"It is difficult to even get water in from wells outside the town because of the positions of the forces," said Abdulrahman, a resident of Zintan in the west, cut off by pro-Gadafy forces.
The UN refugee agency UNHCR said it had reports of thousands of families living in makeshift shelters cut off from any kind of assistance.
Protection of civilians remains the most urgent goal of the air strikes, and British prime minister David Cameron accused Col Gadafy's supporters of "murderous attacks" on Misrata.
A series of powerful explosions rocked Tripoli today and state television said several targets in the Libyan capital had come under attack in rare daytime strikes.
The Pentagon said 115 strike sorties had been flown against Col Gadafy's forces in the last 24 hours, and 22 Tomahawk cruise missiles had been fired.
The United States is scaling back to a "supporting role" to let Nato take full command of the air campaign from US forces tomorrow, but air strikes by US, French and British planes remain key to smashing Col Gadafy's armour.
Washington says it has seen no evidence of civilian casualties of the bombardment, but Col Gadafy accused Western powers of massacres of Libyan civilians in alliance with rebels he said were al-Qaeda members.
"Stop your brutal and unjust attack on our country ... Hundreds of Libyans are being killed because of this bombardment. Massacres are being mercilessly committed against the Libyan people," he said in a letter to world leaders.
"We are a people united behind the leadership of the revolution, facing the terrorism of al-Qaeda on the one hand and on the other hand terrorism by NATO, which now directly supports al-Qaeda," Libya's official news agency quoted him as saying.
The rebels deny any al-Qaeda links and on Tuesday promised free and fair elections if Col Gadafy is forced from power.
Admiral James Stavridis, head of US European Command, told the US Senate that intelligence on the rebel forces had shown 'flickers' of al-Qaeda or Hezbollah presence, but no "detail sufficient to say there is a significant al-Qaeda presence".
Reuters