Western powers kept up the pressure to force Gadhafi out with new airstrikes in other parts of Libya, hints that they may arm the opposition and intense negotiations behind the scenes to find a country to give haven to Libya's leader of more than 40 years.
Even as it advanced militarily, Gadhafi's regime suffered a blow to its inner circle with the apparent defection of Foreign Minister Moussa Koussa. Koussa flew from Tunisia to an airport outside London and announced he was resigning from his post, according to a statement from the British government.
Moussa Ibrahim, a Libyan government spokesman in Tripoli, denied that the foreign minister has defected saying he was in London on a "diplomatic mission."
It was not immediately possible to confirm either statement with Moussa or people close to him.
Gadhafi's justice and interior ministers resigned shortly after the uprising began last month, but Koussa would be the first high-profile resignation since the international air campaign began.
Airstrikes have neutralized Gadhafi's air force and pounded his army, but his ground forces remain far better armed, trained and organized than the opposition.
The shift in momentum back to the government's side is hardening a U.S. view that the poorly equipped opposition is probably incapable of prevailing without decisive Western intervention — either an all-out U.S.-led military assault on regime forces or a decision to arm the rebels.
In Washington, congressional Republicans and Democrats peppered senior administration officials with questions about how long the U.S. will be involved in Libya, the costs of the operation and whether foreign countries will arm the rebels.
NATO is in the process of taking over control of the airstrikes, which began as a U.S.-led operation. Diplomats said they have given approval for the commander of the NATO operation, Canadian Gen. Charles Bouchard, to announce a handover on Thursday.
Gadhafi's forces have adopted a new tactic in light of the pounding airstrikes have given their tanks and armored vehicles, a senior U.S. intelligence official said. They've left some of those weapons behind in favor of a "gaggle" of "battle wagons": minivans, sedans and SUVs fitted with weapons, said the official, who spoke anonymously in order to discuss sensitive U.S. intelligence on the condition and capabilities of rebel and regime forces. Rebel fighters also said Gadhafi's troops were increasingly using civilian vehicles in battle.
The change not only makes it harder to distinguish Gadhafi's forces from the rebels, it also requires less logistical support, the official said.
The official said airstrikes have degraded Gadhafi's forces since they were launched March 19, but the regime forces still outmatch those of the opposition "by far," and few members of Gadhafi's military have defected lately.
The disparity was obvious as government forces pushed back rebels about 100 miles (160 kilometers) in just two days. The rebels had been closing in on the strategic city of Sirte, Gadhafi's hometown and a bastion of support for the longtime leader, but under heavy shelling they retreated from Bin Jawwad on Tuesday and from the oil port of Ras Lanouf on Wednesday.
Gadhafi's forces were shelling Brega, another important oil city east of Ras Lanouf. East of the city in Ajdabiya, where many rebels had regrouped, Col. Abdullah Hadi said he expected the loyalists to enter Brega by Wednesday night.
"I ask NATO for just one aircraft to push them back. All we need is air cover and we could do this. They should be helping us," Hadi said.
The battlefield setbacks are hardening a U.S. view that the opposition is probably incapable of prevailing without decisive Western intervention, a senior U.S. intelligence official told The Associated Press, speaking on condition of anonymity.
Obama's director of national intelligence, James Clapper, compared the rebel forces to a "pick-up basketball team."
Gadhafi's forces also have laid land mines in the eastern outskirts of Adjabiya, an area they held from March 17 until Saturday, when airstrikes drove them west, according to Human Rights Watch.
The New York based group cited the electricity director for eastern Libya, Abdal Minam al-Shanti, who said two anti-personnel mines detonated when a truck ran over them, but no one was hurt. Al-Shanti said a civil defense team found and disarmed more than 50 mines in what Human Rights Watch described as a heavily traveled area.
NATO planes flew over the zone where the heaviest fighting was under way earlier Wednesday and an Associated Press reporter at the scene heard explosions, but it was unclear whether any airstrikes hit the area. U.S. Marine Corps Capt. Clint Gebke, a spokesman for the NATO operation aboard the USS Mount Whitney, said he could not confirm any specific strikes but that Western aircraft were engaging pro-Gadhafi forces in areas including Sirte and Misrata, the rebels' last significant holdout in western Libya.
The retreat Wednesday looked like a mad scramble: Pickup trucks, with mattresses and boxes tied on, driving east at 100 mph (160 kilometers per hour).
And as the fighting approached Ajdabiya, residents there made an exodus of their own. The road to the rebels' de-facto capital, Benghazi, was packed with vehicles, most of them full of families and their belongings. Streets on the western side of Ajdabiya were deserted and silent.
Rebel military spokesman Col. Ahmed Bani said the rebels had made a "tactical retreat" to Ajdabiya and will set up defensive positions there. "Even with courage and determination, the forces need power to be able to fight back," he said.
Bani said he heard from three sources, including one in Chad, that 3,200 to 3,600 heavily armed members of the Chadian presidential guard were marching from Sirte toward Ajdabiya. The report could not be independently confirmed.
As Gadhafi's forces push rebels toward Benghazi, some 140 miles (220 kilometers) northeast of Brega, pressure is growing for NATO members and other supporters of the air campaign to do more.
Prime Minister David Cameron said Britain believes a legal loophole could allow nations to supply weapons to Libya's rebels — but stressed the U.K. has not decided whether it will offer assistance to the rebels.
U.S. Secretary of State Hillary Rodham Clinton said Tuesday that Washington also believes it would be legal to give the rebels weapons. Asked whether the U.S. would do so, President Barack Obama told NBC, "I'm not ruling it out, but I'm also not ruling it in."
NATO officials and diplomats said the alliance had not considered arming the rebels. Any alliance involvement would require support from all 28 members, a difficult task, and an alliance official who could not be named under standing regulations said NATO "wouldn't even consider doing anything else" without a new U.N. resolution.
China, Russia and Germany oppose supplying weapons to the rebels.
Under the U.N. resolution authorizing necessary measures to protect civilians, nations supplying weapons would need to be satisfied they would be used only to defend civilians — not to take the offensive to Gadhafi's forces.
Chinese President Hu Jintao said the operation already had gone too far. He called for an immediate cease-fire and admonished French President Nicolas Sarkozy at a diplomatic meeting in Beijing. Hu called for peaceful efforts to restore stability, expressed China's concern that Libya may end up divided and said force would complicate a negotiated settlement.
Diplomats were attempting to persuade Gadhafi to leave without military force.
Italian Foreign Minister Franco Frattini said negotiations on securing Gadhafi's exit were being conducted with "absolute discretion" and that there were options on the table that hadn't yet been formalized.
"What is indispensable is that there be countries that are willing to welcome Gadhafi and his family, obviously to end this situation which otherwise could go on for some time," he said.
But the Italian diplomat insisted immunity for Gadhafi was not an option.
Uganda became the first country to publicly offer Gadhafi refuge. The spokesman for Uganda's president, Tamale Mirundi, told the AP on Wednesday that he would be welcome there.
Gadhafi has shown no public sign he might leave power, vowing to fight until the end. His forces were continuing to besiege Misrata, the rebels' main western holdout.
An activist in Misrata said there have been power outages, and water service was cut off so residents must rely on wells, but the biggest problem was a lack of medical supplies such as anesthesia and sterilizers, along with diapers and baby formula. Four people in the town were killed Tuesday, the activist said.
Libyan officials took journalists to the home of a family who said their 18-month-old son was killed in an airstrike Tuesday morning against an ammunition dump in the mountain village of Khorum, 55 miles (90 kilometers) south of Tripoli. They say their home was hit by a stray missile when the dump was hit. Their account could not be independently confirmed.
British and other diplomats were involved in negotiations with the rebel leadership in Benghazi. Cameron's spokesman Steve Field said it was partly to gauge if the opposition would be trustworthy allies — "learning more about their intentions."
NATO's top commander, U.S. Navy Adm. James Stavridis, has said officials have seen "flickers" of possible al-Qaida and Hezbollah involvement with the rebel forces. Bani, the rebel military spokesman, dismissed accusations that al-Qaida elements are fighting with the rebels.
"If there are elements that were with al-Qaida in the past and they are now in Libya, they are now fighting for Libya, not for al-Qaida," he said, emphasizing the word "if."
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