"Colonel Khadafi must relinquish power immediately," said a European Union statement from Brussels at the end of an emergency summit on the crisis.
"His regime has lost all legitimacy and is no longer an interlocutor for the EU," it added. The 27-nation bloc expressed "deep concern about attacks against civilians, including from the air.
But it also stressed the need for "a clear legal basis and support from the region", reflecting divisions over the advisability of military intervention.
The legal basis sought by EU states would be a UN Security Council resolution authorising action.
The statement also called for a urgent summit between the EU, the African Union and the Arab League to discuss the crisis. French President Nicolas Sarkozy said that would take place "in the coming weeks."
The Arab League is due to meet in Cairo on Saturday. The African Union rejected military intervention in Libya, at a meeting in the Ethiopian capital Addis Ababa on Friday.
There was no mention in the final EU statement of calls from Britain and France for a no-fly zone over Libya -- let alone French President Nicolas Sarkozy proposal for "targeted action" against Kadhafi.
German Chancellor Angela Merkel had made it clear she was "fundamentally sceptical" on the question of any military intervention.
In Washington, President Barack Obama told reporters Friday: "Across the board, we are slowly tightening the noose on Kadhafi.
"He is more and more isolated internationally both through sanctions as well as an arms embargo," Obama said.
But he admitted he was worried about the threat Kadhafi still posed given the weapons at his disposal and reports that he had been hiring mercenaries.
"We`re going to have to continue to apply pressure," Obama said, as the US Treasury Department hit another nine Kadhafi associates with sanctions, including his wife Safia Farkash and his defense minister.
The US has already frozen $32 billion in Libyan assets.
Obama also announced he would appoint envoys to meet the Libyan opposition.
Also in Washington, Libya`s former ambassador to the UN, Abdel Rahman Shalgam, said Secretary of State Hillary Clinton would meet Mahmoud Jibril, the Libyan opposition National Council`s foreign affairs chief, in Paris on Monday.
In Libya itself however, Kadhafi`s fighter jets bombed rebel forces, as his forces tried to press the iniative won in recent victories.
Rebels said fighting had flared again in the key eastern oil hub and frontline town of Ras Lanuf, after most of them were driven out in a fierce battle on Thursday after holding it for a week.
In the midst of a heavy-weapons duel, a warplane dropped bombs on a rebel checkpoint 10 kilometres (six miles) east of the town and on a nearby oil refinery, but no casualties were reported.
An AFP reporter saw flames and a massive plume of thick black smoke rising from the refinery, the second facility to be hit in the week`s fighting.
A second strike hit rebel positions about 15 kilometres (10 miles) east of town.
Pro-Kadhafi state television reported: "The population of Ras Lanuf is overjoyed after the town was purged of armed gangs backed by Al-Qaeda."
There was no reliable casualty figure from Friday`s fighting, but an AFP reporter saw at least five bodies, while doctors said 10 people were killed on Thursday.
Earlier, rebels fired a salvo of at least 12 Katyushas from a rocket launcher mounted on the back of a truck, and what rebels said were loyalist army shells and Grad rockets were heard exploding further west.
Volunteer medics in Libya called for international help.
A few kilometres east of Ras Lanuf, Doctor Awad el-Ghweiry feared his makeshift clinic would not be able to cope.
"Where are all the international organisations?" he demanded, as he and his colleagues treated three rebels and three loyalists.
In the western city of Zawhiya, Kadhafi`s troops fired into the air to celebrate the capture of the rebel stronghold, which put up a fierce two-week resistance.
And the country`s oil chief Shukri Ghanem told AFP that operations had resumed after a three-day suspension at a key refinery in Zawiyah which supplies the capital and western Libya.
But in eastern, rebel-held Benghazi, up to 10,000 people poured onto the streets on Friday in a carnival-like atmosphere, calling for Kadhafi to go and praying for victory.
Libya has suspended diplomatic relations with France, Kadhafi`s deputy foreign minister Khaled Kaaim said Friday, after Paris recognised the Libyan rebels` self-proclaimed national council a day earlier.
A UN mission would visit Libya on Saturday to evaluate its humanitarian needs, Kaaim told reporters in Tripoli.
In New York UN chief Ban Ki-moon said his envoy, former Jordanian foreign minister Abdul Ilah Khatib, would raise international concerns about Kadhafi`s deadly crackdown on protests "in no uncertain terms".
The opposition, with its fighters in retreat, has appealed for foreign intervention.
Mustafa Abdel Jalil, head of the rebel national council, called Thursday for both a no-fly zone and a sea embargo, as well as weapons and medical aid for the cities threatened by Kadhafi`s troops.(*)
Editor: Jafar M Sidik
Copyright © ANTARA 2011
