Al Jazeera television has said that Libyan rebels have rejected an offer by Muammar Gaddafi to hold a meeting of parliament to work out a deal under which he would step down.
Al Jazeera has said that sources from the rebel interim council told its correspondent in Benghazi that the offer was rejected because it would have amounted to an 'honourable' exit for Gaddafi and would offend his victims.
The television broadcaster said Gaddafi wanted guarantees of personal safety for him and his family and a pledge that they not be put on trial.
The network said that Gaddafi had sent former prime minister Jadallah Azzouz Talhi to meet the rebels and offer to hold a meeting of the General People's Congress to work out the details of such a deal.
Meanwhile, a British-French resolution demanding a no-fly zone over Libya could go before the United Nations Security Council this week.
Britain's foreign minister has insisted that there must 'a clear legal basis' for the zone and set other conditions.
The White House pushed back against pressure from some US lawmakers for direct intervention in Libya, saying it first wanted to figure out what various military options could achieve.
Earlier, Libyan rebels ceded ground to Muammar Gaddafi's advancing forces as the US came under increasing pressure to arm the opposition and the UN appointed a humanitarian envoy.
World oil prices rose again, while NATO head Anders Fogh Rasmussen said attacks on civilians by Gaddafi's troops could amount to crimes against humanity.
The rebels began pulling back from the key oil port of Ras Lanuf, amid fears that government forces were preparing an attack as fighter jets targeted defences on the edge of town.
There were casualties, including at least two children, in one air strike on a civilian car, witnesses said.
After the bloodiest fighting of the three-week-old conflict yesterday, the United Nations demanded urgent access to scores of 'injured and dying' in the western city of Misrata.
Meanwhile, Gadaffi has accused the US, Britain and France of 'a conspiracy to divide Libya' as pressure built to arm the rebels and the UN named a special envoy to Tripoli.
The worsening conflict sent world oil prices higher, while NATO head Anders Fogh Rasmussen said attacks on civilians by Kadhafi's troops could amount to crimes against humanity.
UN appoints humanitarian envoy
Meanwhile, UN chief Ban Ki-moon named Jordan's former foreign minister Abdul Ilah Khatib as his special envoy to deal with the regime on humanitarian issues.
Ban's office said he noted that 'civilians are bearing the brunt of the violence, and calls for an immediate halt to the government's disproportionate use of force and indiscriminate attacks on civilian targets.'
The UN called for €114m to cover relief support including shelter, food and sanitation for refugees as well as others who remain trapped in the strife-torn north African country.
US President Barack Obama said that senior officials who have remained loyal to Gaddafi would be 'held accountable' for the regime's bloody crackdown.
With the military situation worsening and population centres threatened, influential US politicians argued strongly for Washington to arm the rebels and secure a no-fly zone over Libya to thwart Gaddafi's warplanes.
Airstrikes
Gaddafi has not hesitated to use his air power against rebel positions.
Reports that his jets bombed protestors in Benghazi in the early days of the revolt are among alleged atrocities being investigated by war crimes prosecutors from the International Criminal Court.
The odd crackle of gunfire sounded early today across the deserted streets of Ras Lanuf, after vehicles loaded with armed rebels were seen speeding out of the town.
The rebels had been forced to withdraw from Bin Jawad, 30km west along the coast from Ras Lanuf, where at least 12 people were killed and more than 50 wounded when pro-Gaddafi troops ambushed outgunned and inexperienced rebel forces, medics said.
Ras Lanuf's sole hospital was empty today after the wounded were moved to Ajdabiya, further east in rebel territory.
The remaining rebel presence appeared very thin, with only about a dozen fighters manning the main checkpoint into the town.
Gaddafi, in an interview aired today by France24 television, repeated his accusation that al-Qaeda was fomenting the revolt against his regime and railed against France.
When asked about Paris's backing for the national council - the embryonic provisional government formed by rebels in the second city of Benghazi – Gaddafi said: 'It makes one laugh, this interference in internal affairs.
'And what if we interfered in the affairs of Corsica or Sardinia?' he said, speaking in Arabic.
World oil prices shot higher, striking two-and-a-half year highs on the turmoil in the Middle East.
