Gaddafi forces strike back in west and east Libya, Posted by Meosha Eaton

* Government forces intensify campaign to crush revolt
* Aircraft strike behind rebel lines
* Tripoli denies offering to negotiate Gaddafi's exit

(Adds more from Zawiyah, other details)

By Maria Golovnina and Alexander Dziadosz

TRIPOLI/RAS LANUF, Libya, March 8 (Reuters) - Libyan government forces attacked rebels with rockets, tanks and warplanes on western and eastern fronts, intensifying their offensive to crush the revolt against Muammar Gaddafi.

Rising casualties and the threats of hunger and a refugee crisis increased pressure on foreign governments to act, but they struggled to agree a strategy for dealing with the turmoil, many fearful of moving from sanctions alone to military action. In besieged Zawiyah, the closest rebel-held city to Tripoli, trapped residents cowered from the onslaught on Tuesday.

"Fighting is still going on now. Gaddafi's forces are using tanks. There are also sporadic air strikes ... they could not reach the centre of the town which is still in the control of the revolutionaries," a resident called Ibrahim said by phone. "Many buildings have been destroyed including mosques. About 40 to 50 tanks are taking part in the bombardment." In the east, much of which is under rebel control, warplanes bombed rebel positions around the oil port of Ras Lanuf.

Rebel euphoria seemed to have dimmed. "People are dying out there. Gaddafi's forces have rockets and tanks," Abdel Salem Mohamed, 21, told Reuters near Ras Lanuf. "You see this? This is no good," he said of his light machinegun. The rebel leadership said that if Gaddafi stepped down within 72 hours it would not seek to bring him to justice.

Earlier, the rebels said they had rejected an offer from the Libyan leader to negotiate his surrender of power. The government called such reports "absolute nonsense". Britain and France led a drive at the U.N. for a no-fly zone which would prevent Gaddafi from unleashing air raids or moving reinforcements by air. The Arab League and several Gulf states have also called for such a step.

"It is unacceptable that Colonel Gaddafi unleashes so much violence on his own people and we are all gravely concerned about what would happen if he were to try to do that on an even greater basis," British Foreign Secretary William Hague said. Russia and China, who have veto power in the U.N. Security Council, are cool towards the idea of a no-fly zone.

The U.S. government, whose interventions in Iraq and Afghanistan enraged many of the world's Muslims, said it was weighing up military options and that action should be taken only with international backing. Hafiz Ghoga, spokesman for the rebel National Libyan Council, told a news conference in the rebel base of Benghazi:

"We will complete our victory when we are afforded a no-fly zone. If there was also action to stop him (Gaddafi) from recruiting mercenaries, his end would come within hours."

Rebels still controlled the central square of Zawiyah, 50 km (30 miles) west of Tripoli, on Tuesday and were using loud hailers to urge residents to defend their positions, said a Ghanaian worker who fled the town on Tuesday. Sky television footage of fighting in the town over the weekend showed crowds fleeing gunfire and a blood-spattered hospital crammed with the injured, some making victory signs from stretchers. It showed bodies of dead soldiers, others it said had switched sides, and captured tanks.

A government spokesman insisted troops were mostly in control on Tuesday. "Maybe 30-40 people, hiding in the streets and in the cemetery. They are desperate," he said in Tripoli. A Libyan man who lives abroad said he spoke by phone on Tuesday to a friend in Zawiyah who described desperate scenes. "Many buildings are completely destroyed, including hospitals, electricity lines and generators," he said.

"People cannot run away, it's cordoned off. They cannot flee. All those who can fight are fighting, including teenagers. Children and women are being hidden."
Tanks were firing everywhere, he said.The reports could not be verified independently as foreign correspondents have been prevented from entering Zawiyah and other cities near the capital without an official escort.

HOMES HIT
Air strikes hit at rebels behind the no-man's land between the coastal towns of Ras Lanuf and Bin Jawad, 550 km (340 miles) east of Tripoli and the site of oil terminals.
One strike smashed a house in a residential area of Ras Lanuf, gouging a big hole in the ground floor. Mustafa Askat, an oil worker, said one bomb had wrecked a water pipeline and this would affect water supplies to the city.

"We have a hospital inside, we have sick people and they need water urgently," he said.
A convoy from the U.N. food agency was scheduled to reach the rebel-held port of Benghazi on Tuesday to deliver the first food aid in Libya since the revolt erupted three weeks ago. The rebel army -- a rag-tag outfit largely made up of young volunteers and military defectors -- made swift gains in the first week of the uprising which saw them take control of the east and challenge the government near Tripoli.

But their momentum appears to have stalled as Gaddafi's troops have pushed back with heavy weapons.Rebels said government forces had dug in their tanks near Bin Jawad while rebels retreated to Ras Lanuf. The two towns are about 60 km (40 miles) apart on the strategic coastal road along the Mediterranean sea. The emerging front line divides the country along ancient regional lines, with key oil facilities stuck in the middle.


72-HOUR DEADLINE
Gaddafi has denounced the rebels as drug-addled youths or al Qaeda-backed terrorists, and said he will die in Libya rather than surrender.

"If he leaves Libya immediately, during 72 hours, and stops the bombardment, we as Libyans will step back from pursuing him for crimes," Mustafa Abdel Jalil, head of the rebel National Libyan Council, told Al Jazeera television. Representatives of the Libyan opposition are to meet the European Union's foreign policy chief Catherine Ashton in Strasbourg on Tuesday evening before addressing the European Parliament.

The Libyan uprising is the bloodiest of a tide of protests against autocratic rulers in North Africa and Middle East which has already seen the leaders of Tunisia and Egypt dethroned. The phenomenon has left the West struggling to formulate a new direction for a region that sits on vast reserves of oil. Brent crude futures for April delivery fell $1.94 to $113.10 a barrel by 1737 GMT, after rising sharply on Monday.

Libyan oil trade has virtually been paralysed as banks decline to clear payments in dollars due to U.S. sanctions, trading sources told Reuters on Tuesday.

(Additional reporting by Michael Georgy in Tripoli, Alexander Dziadosz in Ajdabiya, Mohammed Abbas in Ras Lanuf, Hamid Ould Ahmed in Algiers and Stefano Ambrogi in London; Writing by Andrew Roche: Editing by Diana Abdallah)