The Libyan government has dismissed as "mad" an offer of a conditional ceasefire by rebel forces.
One of the opposition leaders, Mustafa Abdul Jalil, proposed a ceasefire if Muammar Gaddafi's troops withdrew from siege positions around key cities.
But government spokesman Moussa Ibrahim rejected the call, labelling the rebels "tribal, violent, [with] no unified leadership, al-Qa'ida links".
He added: "If this is not mad, I don't know what it is.
"We will not leave our cities and we will not stop protecting our civilians."
His comments come as seven civilians are reported to have been killed in a Nato air strike as efforts to cripple the dictator's military and diplomatic power base continued.
The casualties - including three girls from the same family - happened when planes targeted a convoy in the eastern village of Zawia el Argobe.
Shrapnel was sprayed into nearby houses after a truck carrying ammunition was hit, according to the BBC.
However, local doctors said the girls' family bore "no anger" towards coalition forces because there would have been a "massacre" if tanks had reached nearby Ajdabiya.
Nato said it was still trying to verify the reports.
The apparent tragedy emphasised the dangers of trying to help the rebels from the air as they struggle to hold off Gaddafi's better-armed and trained forces.
The US has announced that from today its warplanes will no longer carry out air strikes, although they will be available if assistance is requested by the Nato commander.
That will leave the UK, France and Canada responsible for hitting targets on the ground.
Senior British figures voiced concerns about the length of the mission in Libya and its potential for success during a debate in the House of Lords yesterday.
Labour's former defence secretary Lord Robertson, secretary-general of Nato from 1999 to 2003, warned that
European ground troops might be needed to finish off the Gaddafi regime and provide stability in the wake of the dictator's departure.
But Lord West of Spithead, a former chief of the Royal Navy, warned: "If there were any move towards the use of land forces, I believe we should immediately leave the coalition," he said.
Lord Craig of Radley, chief of defence staff at the time of the first Gulf War, said "loose talk of arming the rebels" smacked of "mission creep".
Air Chief Marshal Lord Stirrup, who was head of the Armed Forces until last year, said: "Our military intervention can only end with his (Gaddafi's) removal."
The coalition appears to be making better progress on the diplomatic front, with growing signs of nervousness in Gaddafi's inner circle.
It emerged yesterday that a close aide to Gaddafi's son Saif held private talks with government officials during a recent visit to London.
But Downing Street said the only message passed on was that violence had to stop and the dictator "needs to go". "There are no deals," the Prime Minister's spokesman added.
Officials are still debriefing high-profile defector Musa Kusa, who flew to Britain on Wednesday, declaring he was no longer willing to work for the regime.
There is increasing pressure for the government to hand over Mr Kusa to police for questioning on Lockerbie and on the murder of Pc Yvonne Fletcher, shot outside the Libyan People's Bureau in London in 1984.
Scottish First Minister Alex Salmond said police wanted to talk to Kusa "on the basis of information that might be provided" and that there was no suggestion at this stage that he was being treated as a suspect.
"Nonetheless, there is every reason to believe that this individual can shed light on the Lockerbie atrocity and the circumstances that led up to it," Mr Salmond told Sky News.
Speaking in Swansea during a Tory Welsh Assembly election campaign event yesterday, David Cameron said the action in Libya was "difficult and dangerous" for British forces but insisted the UK should be proud of its role.
"I think we should be clear that by acting rapidly with our allies, with France, with America, we have prevented a massacre in Benghazi of innocent people and we stopped a deadly dictator in his tracks," he said.
Two weeks after Britain's military intervention began in Libya, Defence Secretary Liam Fox said the international community would continue to intervene "as long as Gaddafi is threatening the civilian population".
He said he hoped those around the dictator would recognise they were in a "hopeless position".
Dr Fox told Sky News: "We hope to see sense will prevail in those around Gaddafi recognising that if they continue to wage war on their own people they will be held accountable for crimes against humanity in the international criminal court."
He suggested it was the "ultimate in hypocrisy" for the Gaddafi regime to talk about civilian casualties as a result of the coalition's air strikes.
"The international coalition has been extraordinarily careful to avoid civilian casualties where at all possible," he added.
Dr Fox told BBC Radio 4's Today programme he was convinced there was "division" in Gaddafi's regime, and its members should recognise it "no longer has any legitimacy".
Asked whether Kusa and others who tried to abandon the dictator could receive soft treatment in the UK, he said: "We are not going to give an ongoing discussion about that but it is very clear that in Britain our judicial system moves independently from government."
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