Muammar Gadafy launched a land and air offensive to retake territory in Libya's east at dawn today, sparking a rebel call for foreign air strikes on African mercenaries they said were helping him stay in power.
The veteran ruler twinned the attack with a fiery propaganda broadside against the rebels, playing on both nationalist opinion and Western jitters by saying much blood would be shed in "another Vietnam" if foreign powers intervened in the crisis.
"We will enter a bloody war and thousands and thousands of Libyans will die if the United States enters or Nato enters," Mr Gadafy told Tripoli supporters at a gathering televised live.
"We are ready to hand out weapons to a million, or 2 million or 3 million, and another Vietnam will begin. It doesn't matter to us. We no longer care about anything."
On the battlefield, government troops briefly captured Brega, an oil export terminal, before being driven back by rebels who have held the town 800 km east of Tripoli for about a week, rebel officers said, adding they were ready to move westwards against Mr Gadafy's forces if he refused to quit.
A further bombing raid 2 km from the oil terminal was reported late in the afternoon, a witness said. Estimates of the death toll during the day ranged between five and 14.
Mr Gadafy, who once said ballot box democracy was for donkeys, told the gathering in Tripoli the world did not understand that he had given power to the people long ago.
"We put our fingers in the eyes of those who doubt that Libya is ruled by anyone other than its people," he said at a Tripoli gathering broadcast live on Libyan television, referring to his system of "direct democracy" launched at a meeting attended by visiting Cuban leader Fidel Castro in 1977.
Referring to an unprecedented two-week-old popular uprising against his rule, Mr Gadafy also called for the United Nations and Nato to probe the facts about what had happened in Libya, and said he saw a conspiracy to colonise Libya and seize its oil.
The assault appeared to be the most significant military operation by Mr Gadafy since the uprising erupted in mid-February and set off a confrontation that Washington says could descend into a long civil war unless Mr Gadafy steps down.
Witnesses said the attack was backed by heavy weapons and air strikes. One of the witnesses said Mr Gadafy's forces were 2-3 km from the city centre and had 300-350 rebels pinned down at an oil industry airport on the city outskirts.
Analysts cautioned against drawing firm conclusions from fast moving events in a situation of erratic communications.
In the opposition bastion of Benghazi, a rebel National Libyan Council called for UN-backed air strikes on African mercenaries it said Mr Gadafy was using against his own people.
"We call for specific attacks on strongholds of these mercenaries," said council spokesman Hafiz Ghoga. "The presence of any foreign forces on Libyan soil is strongly opposed. There is a big difference between this and strategic air strikes."
Any sort of foreign military involvement in Arab countries is a sensitive topic for Western nations uncomfortably aware that Iraq suffered years of bloodletting and al-Qaeda violence after the 2003invasion which toppled Saddam Hussein.
In a possible response to Western hints that the opposition needs to unify to facilitate rebel links with outside powers, Mr Ghoga added that a former justice minister, Mustafa Abdel, Jalil, would be chairman of the Council which will have 30 members and be based in Benghazi before moving later to Tripoli.
There are fears that the uprising, the bloodiest yet against long-serving rulers in the Middle East, is causing a major humanitarian crisis, especially on the Tunisian border where thousands of foreign workers are trying to flee to safety.
The Libyan leader might do something "desperate" to defend his regime, Italy's industry minister said.
"There is a possibility, indeed a real possibility, that Gaddafi might make a desperate last-ditch attempt to free himself from the siege that he finds himself in," said Paolo Romani on Italian television.
In the Netherlands, the International Criminal Court prosecutor said he would open an investigation into the violence in Libya, after the UN Security Council referred the case to the Hague-based court.
Across Libya, tribal leaders, officials, military officers and army units have defected to the rebel cause and say they are becoming more organised. Tripoli is a stronghold for Gadafy in this oil-producing north African state.
Washington says it will keep pressure on Mr Gadafy to quit, and has disclosed it is moving ships and planes closer to Libya in what is widely seen as a symbolic show of force.
Two US amphibious assault ships, the USS Kearsarge and the USS Ponce, passed through Egypt's Suez Canal today, arriving in the Mediterranean, a canal official said.
The White House said the ships were being redeployed in preparation for possible humanitarian efforts but stressed it "was not taking any options off the table".
General James Mattis, commander of US Central Command, told a Senate hearing that imposing a no-fly zone would be a "challenging" operation. "You would have to remove air defence capability in order to establish a no-fly zone, so no illusions here," he said. "It would be a military operation."
At Ras Jdir on the Tunisia border, thousands of Bangladeshi migrant workers, desperate to leave Libya, pressed up against the gates of the frontier crossing, angry at their government for sending no help.
Groups of West African migrant workers also in the crowd chanted for help and held up the flags of Ghana and Nigeria.
About 70,000 people have passed through the Ras Jdir border post in the past two weeks,and many more of the hundreds of thousands of foreign workers in Libya are expected to follow.
Reuters