Muammar Gaddafi, the Libyan leader's forces and rebels are fighting for control of the oil town of Brega as the battle for eastern Libya edged closer to Benghazi, the so-called "rebel capital" in the east.
Al Jazeera's Tony Birtley reported from Benghazi that "there is no immediate threat to Benghazi, and the rebels have a new commander, an experienced commander, who has defected from Gaddafi forces.
"This is good news for the rebel forces as he is reported to have some 8,000 men with him and heavy weapons too.
"Militarily, it is difficult for Gaddafi to come all the way to Benghazi, street fighting will make Gaddafi lose men and their morale may go down."
Separately, rebels say they are fortifying the town of Ajdabiya, against a possible assault by advancing forces loyal to Gaddafi, according to the Associated Press news agency.
Ahmed al-Zwei, a rebel spokesman, said on Tuesday, "intermittent" fighting between the two sides was taking place on an 80-kilometre stretch of road between Ajdabiya and Brega.
On Monday, Libyan jets flew behind rebel lines to bomb Ajdabiyah, the only sizeable town before Benghazi.
Rebels said there had been no casualties.
Colonel Milad Hussein, Libyan army spokesman, said that government forces were "marching to cleanse the country" of insurgents, whom he called "rats and terrorists" and vowed to take on Benghazi.
The lightly armed rebels have been pushed back some 200 kilometres by Gaddafi's better equipped and better trained forces in the past week.
"In Brega it is still advance and retreat, we are not in control and they are not either," rebel fighter Hussein al-Wami told the Reuters news agency.
His report was seconded by fighter Addel Ibriki, who returned to Ajdabiya from Brega on Tuesday morning. "It is still to and from," Ibriki said.
However, according to earlier claims, rebel fighters said they captured and even killed Gaddafi troops in Brega - but government forces contest that claim, saying that they are in control of the town.
Libyan state TV showed some images, on Monday, from Brega port, claiming that it was in government control and at peace.
Al Jazeera correspondents said it was difficult to verify the claims made by both sides.
Meanwhile, Libyan government artillery and tanks re-took the small town of Zuwarah, 120 km west of Tripoli after heavy bombardment, Tarek Abdallah, a resident said by telephone.
On Monday, Gaddafi offered an amnesty to rebel fighters if they agreed to lay down their arms, Libyan state television reported.
Al Jazeera's correspondent in Tripoli said the offer will play on to the emotions of very anxious rebel forces who don't know how they will be able to put up a fight against Gaddafi's forces, given the overwhelming superiority of his military forces.
"There is an enormous degree of anxiety. It's an all-or-nothing game now," Anita McNaught said.
"If the rebels do not manage to hold out against Gaddafi and establish some kind of protective zone in the east of the country, it is almost certain in the wake of this, there would be some dreadful purge of those who dared to raise their hands against the Gaddafi administration.
"People know that unless they are able to keep Tripoli at bay, that the alternative is almost too awful to contemplate. Those fears apply equally in Tripoli; they are just not expressed as openly as they are in the east."
'No-fly zone delay'
As commanders of Gaddafi forces vowed to push deeper into rebel-held territory, diplomatic efforts to impose a no-fly zone made little headway.
On Monday, France pressured G8 foreign ministers at a meeting in Paris, to formalise a move on Libya and back its efforts to speed up a UN Security Council decision on imposing a no-fly zone over the country to prevent Gaddafi forces from using warplanes, but the effort hit snags as partners such as Germany raised doubts.
Guido Westerwelle, German foreign minister called for urgent talks in the Security Council for targeted sanctions on Gaddafi's government, but voiced opposition towards military action.
"We are very sceptical about a military intervention and a no-fly zone is a military intervention," he told reporters after the dinner with G8 counterparts.
In the end, a divided Security Council failed to produce a consensus among its 15 members on a no-fly zone, and Russia said it had questions about the proposal.
"Fundamental questions need to be answered, not just what we need to do, but how it's going to be done," Vitaly Churkin, Russian ambassador, said in New York.
Hillary Clinton, US secretary of state, also held a late-night, 45-minute meeting in Paris, on Monday, with Mahmoud Jibril, a senior Libyan opposition figure, after discussing the widening crisis with French President Nicolas Sarkozy.
The Arab League on Saturday endorsed a no-fly zone, and its decision satisfies one of three conditions set by the Western NATO alliance for it to police Libyan air space, which is the need for regional support. The other two are proof that its help is needed and a Security Council resolution.
Nawaf Salam, Lebanese ambassador, sole Arab representative on the council, said Lebanon wanted it to act as fast as possible.
"We think it is not only a legitimate request, it is a necessary request," he said. "Measures ought to be taken to stop the violence, to put an end to the ... situation in Libya, to protect the civilians there."