Libya accused Britain of damaging an oil pipeline in an air strike, hours after rebels said government attacks had halted production of oil they hope to sell to finance their uprising.
A Nato air strike killed at least five rebels near the Libyan port of Brega today, medics said.
Wounded rebels battling Muammar Gadafy's forces in rebel-held east Libya said their position was hit by an air strike outside the contested port.
"It was a Nato air strike on us. We were near our vehicles near Brega," wounded fighter Younes Jumaa said from his stretcher at a hospital in Ajdabiyah.
A nurse at the hospital said at least five rebels were dead. Medical workers carried uniforms soaked in blood from one of hospital rooms in Ajdabiyah, gateway to the insurgent stronghold of Benghazi in the east.
Rebel fighters were weeping on their knees in the corridor.
"Nato are liars. They are siding with Gadafy," said Salem Mislat, one of the rebels.
There was no immediate comment from Nato. It was the second time in less than a week that rebels had blamed Nato for bombing their comrades by mistake. Thirteen died in an air strike not far from the same spot on Saturday.
The rebels have been fighting to wrest control of Brega from forces loyal to Col Gadafy for a week in a see-saw battle along the Mediterranean coast.
Rebel spokesmen also said Libyan government forces killed five people and wounded 25 in an artillery bombardment of the isolated western city of Misrata last night. The barrage forced the temporary closing of Misrata's port, a vital lifeline for supplies to besieged civilians, the spokesmen said. They added that Nato air strikes hit pro-Gadafy positions around the city.
Misrata, Libya's third city, rose up with other towns against Col Gadafy in mid-February, and has been under siege for weeks, after a violent crackdown put an end to most protests elsewhere in the west of the country.
UN secretary-general Ban Ki-moon expressed concern about deteriorating conditions for civilians in Misrata and Zintan in the west, and Brega in the east. He said the situation in Misrata was particularly grave and called for an immediate end to all attacks against civilians.
The civil war has cut oil output in the major supplier by 80 per cent, a senior government official said today, as rebels and regime forces traded charges over who had attacked oil fields vital to both sides.
Rebels say government attacks on three different installations in the east have halted production of the oil they need to finance the eight-week uprising against Col Gadafy.
But government Deputy Foreign Minister Khaled Kaim told reporters the British air force had damaged an oil pipeline in a strike against the Sarir oilfield that killed three guards.
Nato denied any alliance air strikes in the Sarir area and said forces loyal to Col Gadafy were responsible for an attack which started a fire in the oilfield. It said the Libyan leader was trying to disrupt oil supplies to the rebel-held port of Tobruk.
Shokri Ghanem, chairman of the government National Oil Corporation, said Libya’s production had fallen to 250,000 to 300,000 barrels per day (bpd) compared to 1.6 million before the uprising. He called a reported shipment of Libyan oil by the rebels "very sad" and said it would only contribute to tensions and divide the country.
The Liberian-registered tanker Equator sailed from the port of Marsa el-Hariga, near Tobruk, yesterday, apparently with the first cargo of crude sold by rebels since their uprising began in February. Oil traders said the cargo, vital to fund the uprising, was headed for
The rebels regained ground around the oil port of Brega yesterday but repeated accusations Nato was not doing enough to help them as Col Gadafy's forces unleashed yet more mortar rounds, tank fire and artillery shells on the western city of Misrata.
A French minister said Nato air strikes in Libya risked getting "bogged down" and a top US official warned US lawmakers Libyan agents could be inside the United States and might try to launch retaliatory attacks.
"We want to make certain that we've identified these individuals to ensure no harm comes from them, knowing they may well have been associated with the Gadafy regime," FBI director Robert Mueller said.
Col Gadafy himself appealed for a halt in the air campaign in a rambling three-page letter to US president Barack Obama bluntly dismissed by US secretary of state Hillary Clinton.
"Mr Gadafy knows what he must do," Mrs Clinton told a news conference with Italian foreign minister Franco Frattini, reiterating calls for a ceasefire, the withdrawal of his forces from cities they have stormed and his departure from Libya.