By Tom Pfeiffer
BENGHAZI, Libya (Reuters) - Rebels fighting to overthrow Muammar Gaddafi have rejected an offer from the Libyan leader to negotiate his exit even as they battled to hang on to early gains in the insurrection.
The frontline in east Libya was static on Tuesday, with forces loyal to Gaddafi and rebels manning defenses in a stretch of barren coastline near oil terminals between the towns of Ras Lanuf and Bin Jawad, about 550 km (340 miles) east of Tripoli.
On the international front, Britain and France led a drive at the United Nations for a no-fly zone over Libya, a move that would prevent Gaddafi from unleashing air raids on rebel fighters and towns or from flying in reinforcements.
But the U.S. government resisted pressure from some U.S. lawmakers for direct intervention, saying it first wanted to figure out what military options could achieve in the oil-producing desert state.
The Libyan uprising is the bloodiest of a tide of pro-democracy protests against autocratic rulers and monarchs in North Africa and Middle East which has already seen the longtime leaders of Tunisia and Egypt dethroned this year.
The phenomenon has left the West struggling to formulate a new direction for a region that sits on vast reserves of oil and where stability was until now the political priority.
A spokesman for the rebel National Libyan Council said it had spurned an overture from Gaddafi's camp for talks on him relinquishing power.
"We are not negotiating with someone who spilled Libyan blood and continues to do so. Why would we trust the guy today?" spokesman Mustafa Gheriani told Reuters.
Al Jazeera television reported that the council said it may not pursue Gaddafi, who has ruled for 41 years, for crimes they accuse him of committing if he steps down.
Jadallah Azous Al-Talhi, a former prime minister, earlier appeared on state television to urge rebels to "give a chance to national dialogue to resolve this crisis."
It was impossible to discern if the offer from Gaddafi, who had earlier vowed victory or death, was sincere or a tactic to play for time and confuse rebel strategists.
The rebel army -- a rag-tag outfit largely made up of young, enthusiastic volunteers and military defectors -- made swift gains in the first week of the uprising which saw them take control of the east and challenge the government near Tripoli.
But their momentum appears to have stalled as Gaddafi's troops pushed back using war planes, tanks and heavy weapons.
Gaddafi now appears to be tightening his grip in the capital and the movements of foreign correspondents' there have been restricted.
TANKS DUG IN
Rebels had said on Monday Gaddafi's forces dug in their tanks outside the town of Bin Jawad after recapturing it, while rebels retreated to Ras Lanuf and set up their forward checkpoint just outside the oil town. The two towns are about 60 km (40 miles) apart.
A rebel source said he had reports that Gaddafi's forces launched an air strike on Tuesday on Ras Lanuf.
"Our last checkpoint is still in the same place. We've launched some forward attacks though. Es Sider is in our control. Gaddafi's forces haven't moved either," rebel fighter Hussam al-Rammahi told Reuters.
Es Sider, like other towns along the Mediterranean coast such as Ras Lanuf, Zueitina and Brega, has an oil terminal.
In the rebel-held city of Misrata, between Tripoli and the eastern frontline, the wounded were treated on hospital floors because of a shortage of medical facilities, a resident said.
Misrata is the biggest city in the west not under Gaddafi's control and its stand against a militia commanded by his own son has turned it into a symbol of defiance.
Zawiyah, just 50 km (30 miles) from Tripoli, was in rebel hands but came artillery bombardment on Tuesday as government forces encircled the town, Al Jazeera said.
One of Gaddafi's sons, Saadi, said in an interview with Al Arabiya television his father had not yet thrown his army into full battle against the rebels.
"The tribes are all armed, there are forces from the Libyan army and the eastern region is armed. The situation is not like Tunisia or Egypt," said Saadi, an ex-professional footballer in Italy.
PEOPLE ARE DYING
U.N. aid coordinator Valerie Amos said the fighting across Libya meant that more than a million people fleeing or inside the country needed humanitarian aid.
"Humanitarian organizations need urgent access now," she said. "People are injured and dying and need help immediately." The United Nations appealed for $160 million for an operation over the next months to prepare shelter, food and medicine.
British Foreign Secretary William Hague said London was talking to its allies on a resolution for a no-fly zone, including an "appropriate legal basis." A French source said France also was working on such an initiative.
The Arab League and several Gulf states have also called for a no-fly zone, important support given suspicions in the Muslim world about Western intentions following the U.S.-led interventions in Iraq and Afghanistan.
U.S. Defense Secretary Robert Gates said action should be taken only with international backing. The White House said all options were on the table, including arming rebels.
Russia, a permanent member of the U.N. Security Council with veto powers, said it opposed foreign military intervention.
The Libyan government says it is fighting against al Qaeda terrorists and maintains its security forces have targeted only armed individuals attacking state institutions and depots.
Shipping sources said the fighting had closed the Ras Lanuf terminal and the oil port of Brega. Brent crude prices rose above $118 a barrel on Monday before falling back to $115 and U.S. prices pushed to their highest level since September 2008.
Youcef Yousfi, president of the Organization of Petroleum Exporting Countries, said there were no plans for a crisis meeting of the group and high prices were short term.
(Additional reporting by Michael Georgy in Tripoli, Alexander Dziadosz in Ajdabiya, Mohammed Abbas in Ras Lanuf, Stefano Ambrogi in London, Writing by Angus MacSwan: Eediting by Giles Elgood)