Libyan rebels were driven back some 200 kilometers by the superior firepower of Muammar Gaddafi’s forces on Wednesday in a chaotic stampede which saw them yield most of the ground their recent advances had secured.
But the first air strike in two days against loyalist positions in the east brought them some cause for celebration.
A spokesman for the rebels played down allegations by a top NATO commander that there may be al-Qaeda fighters in their ranks, but said his fighters had come up against a force of thousands of Chadian Republican Guards.
Colonel Ahmed Bani told reporters in the rebel stronghold Benghazi: "If there are any Libyans who were associated with al-Qaeda around the world and are now in Libya, they are fighting on behalf of Libya. If," he emphasized.
Of the hasty retreat, he said: "We found that the best response was a tactical retreat until we can develop a better strategy for confronting this force." There were between 3,200 and 3,600 heavily armed troops, he said and claimed to have "three sources" for the presence of the foreign soldiers.
Gaddafi’s forces overran the towns of Ras Lanuf, Uqayla and Brega, rebels reported, scattering the outgunned insurgents as world powers mulled arming the rag-tag fighters seeking to oust the Libyan strongman.
AFP reporters and rebel fighters said Gaddafi’s troops swept through the oil town of Ras Lanuf, 300 kilometers (185 miles) east of Gaddafi’s hometown Sirte, soon after dawn, blazing away with tanks and heavy artillery fire.
But later, an air strike about 10 kilometers (6.5 miles) west of Ajdabiya, where rebels are sheltering, sent a huge plume of smoke rising into the sky and brought cries of jubilation from the rebel fighters, who had been calling for renewed air support.
Panicked rebels called for air strikes as they fled in their hundreds eastwards through Uqayla, where they briefly regrouped, then on to Brega, where they also halted temporarily before charging to the main city of Ajdabiya, 120 kilometers away.
If there are any Libyans who were associated with al-Qaeda around the world and are now in Libya, they are fighting on behalf of Libya. If
Colonel Ahmed Bani
Britain expels diplomats
Britain is expelling five Libyan diplomats including the country's military attaché, for intimidating opposition groups in London, Foreign Secretary William Hague said, while the Netherlands has frozen more than three billion Euros ($4 billion) of assets as part of EU sanctions against the Libyan regime.
NATO began to take command of Libyan air operations from a U.S.-led coalition as warplanes and other assets from several allies came under the military organization’s control.
As the insurgents were being routed, British Prime Minister David Cameron said in London that the option of arming the rebellion had not been ruled out.
Asked in parliament what Britain's policy was on arming the rebels, given the existence of a United Nations arms embargo on Libya, Cameron replied: "We do not rule it out but we have not taken the decision to do so."
French Foreign Minister Alain Juppe had set the tone at the London conference when he said on Tuesday that France was prepared to hold discussions on delivering arms to the rebels.
Russian Foreign Minister Sergei Lavrov said however Moscow believed that foreign powers did not have the right to do so under the mandate approved by the U.N. Security Council.
And in Beijing, China's President Hu Jintao warned French President Nicolas Sarkozy that air strikes on Libya could violate the "original intention" of the U.N. resolution authorizing them if civilians suffer.
U.S. Secretary of State Hillary Clinton said that although U.N. sanctions prohibit the delivery of arms to Libya, the ban no longer applies.
A spokesman for the rebel Transitional National Council, Mustafa Ghuriani, told reporters "it would be naive to think we are not arming ourselves" to match the weaponry deployed by Gaddafi loyalists.
But he declined to confirm or deny that France and the United States were offering to supply arms, saying only that unspecified "friendly nations" were backing the rebels.
U.S. President Barack Obama, who has laid out a moral imperative for protecting Libyan civilians caught in the battle, also said he did not rule out arming the rebels.
"I'm not ruling it out. But I'm also not ruling it in. We're still making an assessment partly about what Gaddafi’s forces are going to be doing," Obama said.
I'm not ruling it out. But I'm also not ruling it in. We're still making an assessment partly about what Gaddafi’s forces are going to be doing
US President Barack Obama
Government officials meanwhile told Reuters that President Barack Obama has signed a secret order authorizing covert U.S. government support for rebel forces seeking to oust Gaddafi.
Obama signed the order, known as a presidential "finding", within the last two or three weeks, according to four U.S. government sources familiar with the matter.
Such findings are a principal form of presidential directive used to authorize secret operations by the Central Intelligence Agency. The CIA and the White House declined immediate comment.
People familiar with U.S. intelligence procedures said that Presidential covert action "findings" are normally crafted to provide broad authorization for a range of potential U.S. government actions to support a particular covert objective.
In order for specific operations to be carried out under the provisions of such a broad authorization -- for example the delivery of cash or weapons to anti-Gaddafi forces -- the White House also would have to give additional "permission" allowing such activities to proceed.
In 2009 Obama gave a similar authorization for the expansion of covert U.S. counter-terrorism actions by the CIA in Yemen. The White House does not normally confirm such orders have been issued.