By Maria Golovnina and Mohammed Abbas
TRIPOLI/BREGA, Libya (Reuters) - Libyan forces loyal to Muammar Gaddafi, using tanks, rockets and warplanes, are stepping up a campaign to root out rebels as Britain and the United States discuss an internationally backed no-fly zone.
U.S. Secretary of State Hillary Clinton made it clear that Washington believes any decision to impose a no-fly zone over this African oil-producing desert state is a matter for the United Nations and should not be a U.S.-led initiative.
Gaddafi's aircraft and tanks pounded rebels in Zawiyah, the closest rebel-held city to the Libyan stronghold of Tripoli in the west. A relentless government barrage blocked rebels in the east from advancing west to his strategic hometown of Sirte.
"Zawiyah as you knew it no longer exists. They have been attacking the town from 10 in the morning until 11:30 in the evening," Zawiyah resident, Ibrahim, said early on Wednesday:
Only giving one name, he told Reuters by telephone that dozens of bodies were on the streets. "There is no electricity, no water and we are cut off from the outside world," he said.
Counter-attacks by Gaddafi loyalists suggest the flamboyant autocrat in power for 41 years will not go quietly or relatively quickly as fellow leaders in Egypt and Tunisia did in a tide of popular unrest now shaking the Arab world.
PRESSURE TO ACT
Rising casualties and threats of hunger and a refugee crisis have increased pressure on foreign governments to act, but many were fearful of moving from sanctions alone to military action. President Barack Obama has faced criticism for being cautious.
"We want to see the international community support it (a no-fly zone)," Clinton told Sky News. "I think it's very important that this not be a U.S.-led effort."
British Prime Minister David Cameron, who talked with Obama about a no-fly zone by telephone, said planning was vital in case Gaddafi refused to step down in response to the popular uprising that erupted mid-February.
"I think now we have got to prepare for what we might have to do if he goes on brutalizing his own people," the prime minister told the BBC.
In the telephone call, the two leaders "agreed to press forward with planning, including at NATO, on the full spectrum of possible responses, including surveillance, humanitarian assistance, enforcement of the arms embargo, and a no-fly zone."
Britain and France are seeking a U.N. resolution to authorize such a zone to ground Gaddafi's aircraft and prevent him moving troops by air. Russia and China, which have veto power in the U.N. Security Council, are cool toward the idea, which would be likely to require bombing Libyan air defenses.
Hafiz Ghoga, spokesman for the rebel National Libyan Council, said in the rebel base of Benghazi in eastern Libya:
"We will complete our victory when we are afforded a no-fly zone. If there was also action to stop him (Gaddafi) from recruiting mercenaries, his end would come within hours."
In besieged Zawiyah, 50 km (30 miles) west of Tripoli, trapped residents sheltered from the onslaught of four dozen tanks backed up by aircraft firepower.
Libyan television showed two reporters meeting residents on Tuesday in what it said was "liberated Zawiyah." But a Ghanaian worker who fled the city said rebels still controlled the central square, urging residents to defend their positions.
A government spokesman said troops were mostly in control but there was still a small group of fighters. "Maybe 30-40 people, hiding in the streets and in the cemetery. They are desperate," he said in Tripoli.
Foreign reporters have been prevented from entering Zawiyah and other cities near the capital without an official escort.
In the east, much of which is under rebel control, warplanes bombed rebel positions around the oil port of Ras Lanuf where the front line is shifting with rebels in 4x4 trucks mounted with weapons engaging the army in strike and counter-strike.
Revolutionary euphoria seemed to have dimmed. "People are dying out there. Gaddafi's forces have rockets and tanks," Abdel Salem Mohamed, 21, told Reuters near Ras Lanuf. "You see this? This is no good," he said of his light machinegun.
Air strikes hit rebels behind the stretch of no man's land desert between Ras Lanuf and Bin Jawad, 550 km (340 miles) east of Tripoli. The towns are about 60 km (40 miles) apart on the strategic coast road along the Mediterranean Sea.
Pro-Gaddafi troops who had besieged the rebel-held city of Misrata left on Tuesday, driving east toward Sirte with other forces coming from Tripoli, a resident said. There had already been reports Sirte had been reinforced from the south.
SET ON SIRTE
Sirte, hometown and a stronghold of Gaddafi, lies on the road to the emerging front that divides the country along ancient regional lines, with oil facilities in the middle, and has become a symbolic prize targeted by the rebels.
Gaddafi has said rebels were drug-addled youths and al Qaeda-backed terrorists, and said he would die in Libya rather than surrender. One of his sons said if Gaddafi bowed to pressure and quit, Libya would descend into civil war.
Gaddafi and his entourage made a dramatic visit to a Tripoli hotel where foreign journalists were staying late on Tuesday and gave interviews to French and Turkish television.
Early on Wednesday, Libyan television broadcast a speech, recorded a day earlier, by Gaddafi to tribal leaders in Tripoli, his fourth televised address since the uprising began.
Returning to familiar themes, the Libyan leader said the rebels wanted to pave the way for a new colonial era that would allow Britain, France and the United States to divide up the country and control its oil wealth.
Referring obliquely to unrest in the Arab world and elsewhere, he said: "How can (Libyan) parents allow Tunisians, Egyptians, Algerians and Afghans to enroll your children?"
Representatives of the Libyan opposition met EU foreign policy chief Catherine Ashton in Strasbourg and planned to speak at the European Parliament on Wednesday.
Mahmoud Jebril, head of the crisis committee of the National Libyan Council, said the EU should recognize the council as the sole legitimate representative of the Libyan people.
EU states agreed to add the $70 billion Libyan Investment Authority to a sanctions list on Tuesday. The embargo already covers 26 Libyans including Gaddafi and his family.
A Libyan official said Finance Minister Abdulhafid Zlitni had temporarily taken over as head of the central bank because its governor Farhat Omar Bin Guidara was abroad. Bin Guidara said in Dubai he disputed the legality of the decision.
(Additional reporting by Michael Georgy in Tripoli, Alexander Dziadosz in Ajdabiya,Hamid Ould Ahmed in Algiers and Stefano Ambrogi in London; Writing by Peter Millership)