Tobruk: Muammar Gaddafi’s regime has lost vast swaths of Libya`s east to an insurrection, it emerged on Wednesday, as the West braced for a mass exodus from a "bloodbath" in the oil-rich African state.
As Gaddafi sought to cling on to his four-decade grip on power, US President Barack Obama condemned the Libyan leadership`s bloody crackdown on anti-regime protests and orders to shoot protestors as "outrageous".
Thousands of Libyans and foreigners fled the north African country, leaving Gaddafi increasingly isolated as estimates suggested that 640 to more than 1,000 civilians were killed in the backlash by his forces.
Europe readied sanctions and warning it would hold to account those responsible for the bloody crackdown.
At London`s Gatwick airport, Britons airlifted to safety said Tripoli had descended into war-like scenes. "Last night I`ve never been so scared in all my life," said Jane Macefield, an expatriate teacher.
Oil sold in New York crossed the symbolic USD 100 a barrel level, hitting prices not seen since 2008, amid fears over supplies from Libya.
On the ground, Gaddafi opponents appeared in control of Libya`s coastal east, from the Egyptian border through to the cities of Tobruk and Benghazi, with government soldiers switching sides to join the uprising.
Tobruk is located about 100 kilometres (62 miles) from the border and Benghazi, the epicentre of protests, some 400 kilometres further west -- both in the Cyrenaica region.
Journalists saw regime opponents -- many of them armed -- all along the highway that hugs the Mediterranean coast.
Soldiers were declaring their support for the uprising, residents said, but the regime asserted it was still in control via a text message sent on the Libyan national mobile telephone network.
"God give victory to our leader and the people," the message said, promising a credit in cellphone time if it were forwarded to other mobile telephone users.
Italian Foreign Minister Franco Frattini said, "Cyrenaica is no longer under the control of the Libyan government and there are outbreaks of violence across the country," using the name for the province covering the eastern half of the country.
In the country`s third city of Misrata, Gaddafi loyalists fired machine guns and rocket-propelled grenades at demonstrators, killing several people with fears that they could attack again, witnesses said.
Deputy Foreign Minister Khaled Khaim said al Qaeda had set up an Islamic emirate in Derna, between Tobruk and Benghazi, headed by a former Guantanamo Bay inmate.
But local residents dismissed the reports as the Libyan government trying to "scare Europe”.
In the capital Tripoli, streets were mainly empty, barring a few dozen Gaddafi backers, despite his nationally televised call on Tuesday for a show of popular support.
Only Green Square -- a Gaddafi stronghold since the revolt against his four decades of iron-fisted rule broke out on February 15 -- pulsed with activity as pro-regime supporters staged a demonstration.
Libyan authorities said food supplies were available as "normal" in the shops and urged schools and public services to restore regular services, although economic activity and banks have been paralysed since Tuesday.
"The suffering and bloodshed is outrageous, and it is unacceptable," Obama said at the White House, saying Secretary of State Hillary Clinton would attend a meeting of the UN Human Rights Council in Geneva.
In an angry rambling speech on Tuesday, Gaddafi, 68, threatened to purge opponents "house by house" and "inch by inch”.
The International Federation for Human Rights said at least 640 people although Gaddafi`s former protocol chief, Nouri el-Mismari, said the death toll had surpassed 1,000.
"This is the end of Muammar Gaddafi," he said. " Muammar Gaddafi does not even have five percent of the country behind him," he said.
Libya`s bar to the entry of foreign news media has complicated the chronicling of events there, but several correspondents have entered the east of the country from Egypt.
Kaim declared that they were "outlaws" and said they would be arrested if they did not turn themselves in.
Libyans are fleeing, with a UN spokesman saying about 5,000 people have arrived at the border with Tunisia and 15,000 at the border with Egypt.
China, the European Union, France, India, South Korea and the United States, among others, scrambled to evacuate people from the turbulent nation, as the international community expressed outrage at the crackdown.
UN chief Ban Ki-moon demanded international action against attacks on civilians and warned that Libya was now at a dangerous juncture, welcoming moves by to set up a "possible international inquiry into events in Libya”.
Army, police and militias have killed unarmed demonstrators indiscriminately, even to the point where air force planes strafed civilians, according to widespread reports.
In response, Peru suspended diplomatic ties with Libya, the first nation to do so, and numerous ministers, diplomats and military officers have announced their support for the rebellion.
The turmoil in Libya, which has Africa`s largest oil reserves, is the continent`s fourth-largest producer and where many Western oil companies have suspended operations, has sent crude prices soaring.