Libya was on edge on Friday as forces loyal to Moamer Kadhafi's crumbling regime staged a bloody fightback in western towns near Tripoli, as the east declared itself free of his iron-fisted rule.
Outraged Western governments scrambled to craft a collective response to the crisis in the oil-rich North African state, including possible sanctions against Kadhafi's remaining loyalists and a freeze on assets they are believed to have salted away abroad.
But governments were constrained by fears of reprisals against nationals still stranded amid what escaping expatriates described as hellish scenes as evacuation efforts dragged on, on the 11th day of the crisis.
In Az-Zawiyah, west of Tripoli, 23 people were killed and 44 wounded on Thursday when regime loyalists mounted a ferocious rearguard action against protesters in the key oil refinery town, Libya's Quryna paper reported.
"The wounded cannot reach the hospitals because of shots being fired in all directions," said the paper, based in now the opposition-held eastern city of Benghazi quoting its correspondent in Az-Zawiyah.
Heavy fighting was also reported in Libya's third city Misrata, to the west of capital.
In Zouara, further west towards the Tunisian border, fleeing Egyptian workers said the town was in the control of civilian militias after fierce fighting on Wednesday evening.
Addressing his divided nation on Thursday for the second time in three days, Kadhafi, 68, accused residents of the town of siding with Al-Qaeda leader Osama bin Laden.
"You in Zawiyah turn to Bin Laden," he said. "They give you drugs.
"It is obvious now that this issue is run by Al-Qaeda," he said, addressing the town's elders. "Those armed youngsters, our children, are incited by people who are wanted by America and the Western world.
"They have guns, they feel trigger happy and they shoot especially when they are stoned with drugs."
In marked contrast to a 75-minute address from a podium outside his Tripoli home on Tuesday, Kadhafi spoke by telephone from an undisclosed location in an intervention that lasted barely 20 minutes.
His decision to speak by telephone rather than make an on-screen appearance has raised questions about his whereabouts, and indicates that his power base may be shrinking.
In Tripoli, the streets have been largely deserted in recent days but worshippers were expected to turn out at the mosques for the main weekly prayers on Friday, the Muslim day of rest and also a traditional day of protest.
Libya's second city of Benghazi, where the unprecedented protests against Kadhafi's four decade rule first erupted, was firmly in the hands of Kadhafi's opponents, an AFP correspondent said.
Effigies apparently of Kadhafi hung from street lamps in the eastern city and children played on top of an abandoned tank. Police stations had been gutted by fire but residents said there had been no looting.
In the courthouse outside which the demonstrations started, regime opponents set up a revolutionary headquarters to take over the administration of the city as civilian militiamen and mutinous regular army troops patrolled the streets.
Some soldiers were selling their weapons to the highest bidder even as their defecting commanders strove to forge their men into an organized anti-Kadhafi force.
Leading an international outcry over a Libyan death toll now put at as high as 1,000, US President Barack Obama consulted the leaders of Britain, France and Italy on how to "immediately" respond to Kadhafi's brutal crackdown.
France and Britain have proposed the UN Security Council pass a sanctions resolution including a total arms embargo against Libya, French Foreign Minister Michele Alliot-Marie said.
She said the two governments would also propose bringing members of the Libyan regime before the International Criminal Court for crimes against humanity.
EU foreign affairs chief Catherine Ashton said it was time for the bloc to adopt "restrictive measures" of its own against Kadhafi's regime, which could include an assets freeze and a travel ban.
US officials said no option had been ruled out but State Department spokesman Philip Crowley stressed the extreme sensitivity of the situation.
"Whatever steps that we do take, we want them to be effective. And we certainly don't want to take any actions that put either our citizens or the citizens of other countries at risk," he said.
NATO chief Anders Fogh Rasmussen called an emergency meeting of the alliance's council for later on Friday saying it was ready to act as "an enabler and coordinator" if member states take action.
Western governments faced mounting domestic criticism for their failure to organise an evacuation operation more speedily as oil workers stranded in remote camps in Libya's vast desert spoke of their equipment and supplies being looted amid growing lawlessness.
British Prime Minister David Cameron said he was "incredibly sorry" for the delays in getting British nationals home, as the first three planes made it out, carrying adults, children and even a dog.
Russian Prime Minister Vladimir Putin warned that volatility in international oil markets as a result of the instability in Libya posed a "serious threat to the world".
Crude prices rose again in late Asian trade on Friday as markets continued to fret about the turmoil in the Middle East despite a promise from the OPEC oil cartel to make up for any loss of production in Libya.
After dipping earlier in the day, New York's main contract, light sweet crude for April delivery, rose 36 cents to $97.64 per barrel. Brent North Sea crude for April was up $1.26 at $112.62.