Pro-Gadhafi fighters raise their fists to indicate victory as they are pictured during a government-organized visit for foreign media near Ras Lanouf, 380 miles southeast of the capital Tripoli. -AP Photo

AJDABIYAH: Muammar Gaddafi's troops seized the strategic Libyan oil town of Brega on Sunday forcing rebels to retreat under a heavy bombardment while world powers considered imposing a no-fly zone.

Losing Brega and its refinery further limits rebel access to fuel after the insurgents were pushed out of Ras Lanuf on Sunday, another major oil terminal some 100 km to the west along the coast road where all of Libya's important towns are located.

Defeated rebel soldiers were demoralised. “There's no uprising any more,” said rebel Nabeel Tijouri, whose heavy-machinegun had been destroyed in the fighting.

“The other day we were in Ras Lanuf, then Brega, the day after tomorrow they will be in Benghazi.”

“Brega has been cleansed of armed gangs,” a Libyan government army source told state television.

Brega is 220 km south of the rebel stronghold of Benghazi with the town of Ajdabiyah the only sizeable town standing in the way. From Ajdabiyah there are roads to either Benghazi or Tobruk, close to the border with Egypt.

Libya's flat desert terrain means the government's air supremacy and big advantage in tanks outweighs the rebels' enthusiasm and light weaponry. Only towns and cities provide some cover for the insurgents and partially even the odds.

“He's out of Brega. He's on the way, maybe in half an hour his rockets will reach us here,” said rebel fighter, Masoud Bwisir, at the western gate of Ajdabiyah.

The speed of the government advance may overtake drawn-out diplomatic wrangling on whether or how to impose a no-fly zone.

The United States said a call by the Arab League for a UN no-fly zone over Libya was an “important step”, but while Washington said it was preparing for “all contingencies”, it has remained cautious over endorsing direct military intervention.