By Maria Golovnina
TRIPOLI (Reuters) - Muammar Gaddafi's better armed and organized troops reversed the westward charge of Libyan rebels as world powers gathered on Tuesday to plot the country's future without the "brother leader."
Ahead of the conference, President Barack Obama told Americans in a televised address that U.S. forces would not get bogged down trying to topple Gaddafi, but he stopped short of spelling out how the military campaign in Libya would end.
The United States is scaling back to a "supporting role" to let NATO take full command from U.S. forces on Wednesday, but air strikes by U.S., French and British planes remain key to smashing Gaddafi's armor and facilitating rebel advances.
It took five days of allied air strikes to pulverize Libyan government tanks around the town of Ajdabiyah before Gaddafi's troops fled and the rebels rushed in and began a 300-km (200-mile) two-day dash across the desert to within 80 km (50 miles) of the Gaddafi loyalist stronghold of Sirte.
But the rebel pick-up truck cavalcade was first ambushed, then outflanked by Gaddafi's troops. The advance stopped and government forces retook the small town of Nawfaliyah, 120 km (75 miles) east of Sirte.
"The Gaddafi guys hit us with Grads (rockets) and they came round our flanks," said Ashraf Mohammed, a 28-year-old rebel wearing a bandolier of machine gun bullets.
REBELS ON THE RUN
The sporadic thud of heavy weapons could be heard as dozens of civilian cars sped eastwards away from the fight.
One man stopped his car to berate the rebels.
"Get yourselves up there and stop posing for pictures," he shouted, but met little response.
Later, a hail of machinegun and rocket fire hit rebel positions. As the onslaught began, rebels took cover behind sand dunes to fire back but gave up after a few minutes, jumped into their pick-up trucks and sped off down the road to the town of Bin Jawad. Shells landed near the road as they retreated.
Without air strikes it appears the rebels are not able to hold ground or make advances. The battle around Sirte, Gaddafi's birthplace, will show if the rebels have reached their limit.
Reports from retreating rebels that some residents outside Sirte fought alongside government troops are an ominous sign for world powers hoping for a swift end to Gaddafi's 41-year rule.
British Prime Minister David Cameron and French President Nicolas Sarkozy, who led the drive for a muscular intervention in the conflict, called on Monday for Gaddafi to go and for his followers to abandon him before it was "too late."
"We call on all Libyans who believe that Gaddafi is leading Libya into a disaster to take the initiative now to organize a transition process," they said in a statement.
Obama said he had no choice but to act to avoid "violence on a horrific scale" against the Libyan people.
More than 40 governments and international organizations meet in London on Tuesday to set up a steering group, including Arab states, to provide political guidance for the response to the war and coordinate long-term support to Libya.
NO REGIME CHANGE MISSION
U.S. Secretary of State Hillary Clinton met Libyan National Council envoy Mahmoud Jebril before the London meeting. A senior U.S. official said the two could discuss releasing $33 billion in frozen Libyan assets to the opposition.
"They are assets that belong to the Libyan people," the official said, but gave no further details.
Such meetings also help Washington better understand the rebel leadership, its military forces and the problems they face, the official said, though Obama pledged once again that U.S. ground forces would not be deployed to help them out.
"We will deny the regime arms, cut off its supply of cash, assist the opposition and work with other nations to hasten the day when Gaddafi leaves power," Obama said, but the United States would not use force to topple him -- as his predecessor President George W. Bush did in ousting Saddam Hussein in the 2003 U.S.-led invasion of Iraq.
"To be blunt, we went down that road in Iraq," Obama told an audience of military officers in Washington. "But regime change there took eight years, thousands of American and Iraqi lives, and nearly a trillion dollars. That is not something we can afford to repeat in Libya."
Further west, rebels and forces loyal to Gaddafi both claimed control over parts of Misrata and fighting appeared to persist in the fiercely contested city, Libya's third largest.
U.S. forces attacked three Libyan ships, including a coast guard vessel, to stop them firing indiscriminately at merchant ships in the port of Misrata, 200 km (120 miles) east of Tripoli, military officials said on Tuesday.
The action on Monday night was against the Libyan coast guard vessel Vittoria and two smaller craft. The Vittoria was beached, one of the smaller craft was destroyed and the other abandoned, the U.S. Sixth Fleet said in a statement.
The U.S. forces involved were an Air Force A-10 Thunderbolt attack aircraft, the guided missile destroyer USS Barry, and a Navy P-3C maritime patrol aircraft.
The statement said the attack took place after "confirmed reports Vittoria and accompanying craft were firing indiscriminately at merchant vessels"
(Additional reporting by Angus MacSwan, Alexander Dziadosz, Edmund Blair, Maria Golovnina, Michael Georgy, Ibon Villelabeitia, Lamine Chikhi, Mariam Karouny, Joseph Nasr, Marie-Louise Gumuchian, Steve Gutterman, Matt Spetalnick and Alister Bull; Writing by Jon Hemming; Editing by Giles Elgood)