Gaddafi's government, at first reeling from widespread popular uprisings last month, is now confident of success. "We are certain of our victory, whatever the price," state TV said.
Government troops took Brega on Sunday, but the rebels said they had moved back into the important eastern oil terminal town during the night and surrounded Gaddafi's forces.
"Some of them (government troops) have been killed and some have been captured. But they are still in Brega. It is still dangerous and there is still fighting but today we will squeeze them hard," said Idriss Kadiki, a rebel fighter.
Libyan planes bombed Ajdabiyah, behind rebel lines, the only sizeable town between Brega and the rebel stronghold of Benghazi. From Ajdabiyah there are roads to Benghazi and to Tobruk, which could allow Gaddafi's troops to encircle Benghazi.
There is now a very real possibility that by the time world powers agree on a response to the conflict in Libya, Gaddafi's forces may already have won, analysts said.
France is pushing G8 foreign ministers meeting in Paris to agree action on Libya, and back its efforts to speed up a UN Security Council decision on imposing a no-fly zone.
France hopes an Arab League request to the council to impose a no-fly zone would persuade reluctant members to support it.
"Now that there is this Arab League statement, we do hope that it's a game changer for the other members of the council," French UN Ambassador Gerard Araud said
Arab League backing satisfies one of three conditions set by NATO for it to police Libyan air space, that of regional support. The other two are proof its help is needed, and a Security Council resolution.
News of humanitarian suffering or atrocities could persuade more powers that help is needed and also spur Security Council action. But while Human Rights Watch has reported a wave of arbitrary arrests and disappearances in Tripoli, hard evidence is so far largely lacking.
"Everyone here is puzzled as to how many casualties the international community judges to be enough for them to help. Maybe we should start committing suicide to reach the required number," said rebel spokesman Essam Gheriani in Benghazi.
"It is shameful," he said. "We are hoping today for some development such as a resolution" at the Security Council.
In New York, the Security Council began discussing a no-fly zone today, though not yet a draft resolution.
If the Security Council does endorse a no-fly zone, enforcing it will fall largely to the United States, which has has yet to decide whether to back the measure.
"That is a decision, a political decision ultimately, that has not been taken," Pentagon Press Secretary Geoff Morrell told MSNBC television. He added that a no-fly zone was still, however, an option under consideration.
Russia and China are even less enthusiastic, but UN diplomats said they would have difficulty vetoing a no-fly zone when the Arab League had requested it and may instead abstain.
While Russia has opposed military intervention in Libya, it has not ruled out a no-fly zone as long as it is backed by the Security Council. Moscow has asked for details of the Arab League proposal, Foreign Minister Sergei Lavrov said.
As the diplomatic wrangling continues, Gaddafi's tanks and planes have proved more than a match for the rag-tag rebel force, especially in the flat desert terrain in between major towns, pushing them back some 95 miles since the counter-attack began on March 6.
Rebels say the government assaults follow a pattern: first warplanes attack, striking fear into rebel ranks, then comes a rolling artillery barrage as ground troops move in, some of them landing from the sea.
While advancing east, government forces have also moved to crush pockets of resistance left in the west. Government troops attacked Zuwarah today, a small town 60 miles west of Tripoli. Four people were killed.
"They are coming from the eastern side and also trying to get in from the west and the south. They are one kilometre from the centre of town," resident Tarek Abdallah said by telephone.
The only major city held by insurgents outside the east is Misrata, 130 miles east of the capital. Rebels and residents there say an assault on the city has been held up by infighting within the ranks of the besieging government forces.
"The fighting has stopped now. Early today we heard five shells after a fierce night of fighting and now it has stopped," Mohammed, a resident of Misrata, told Reuters by telephone.
"We are not sure why it has stopped. Maybe they got tired or maybe one group won over the other. Things are not clear."
The government strongly denies the reports and it is impossible to verify them, but Gaddafi's troops do appear to have held off attacking Misrata for the last three days.
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