Government jets pounded the rebel-held town of Brega on Thursday sparking fears of a fresh onslaught by loyalist soldiers as a warcrimes court announced a crimes against humanity probe in Libya.
With thousands fleeing a violent crackdown on an anti-regime uprising that began on February 15, evacuations began Thursday of vast crowds stranded at the Tunisian-Libyan border, correspondents said.
A day after Libyan leader Moamer Kadhafi warned the West to stay out of the fray, the Dutch defence ministry announced Thursday three of its marines helping evacuate civilians from Sirte city were captured by Libyan soldiers.
And with the world clamouring for action to stop Kadhafi using warplanes against his own people and to protect refugees scrambling to escape, the United States and NATO cooled talk of imposing a no-fly zone over his country.
In Caracas, officials said Venezuelan President Hugo Chavez and Kadhafi had discussed plans for an international peacekeeping mission to mediate the crisis in Libya. No further details were offered of the talks between the close allies.
On the ground, frightened residents of the Mediterranean coastal town of Brega manned anti-aircraft guns and mounted machine-guns on pick-up trucks after a Libyan warplane dropped two bombs early Thursday near the local oil refinery.
The attack sparked fears of a new bid by troops loyal to Kadhafi\'s regime to recapture the key oil port, 200 kilometres (125 miles) southwest of the main eastern city of Benghazi.
Pro-Kadhafi forces with heavy weaponry launched an onslaught on Brega at dawn on Wednesday in their first incursion in the rebel-held east of the country since the Libyan uprising began on February 15.
Despite air strikes throughout the day, the rebels managed to push the regime\'s forces out of the town, sparking celebrations -- which were themselves targeted by Kadhafi\'s fighter jets.
Throughout Thursday, the rag-tag army of rebels with little military training shored up the defences of Brega, fearing more fighting as reports spoke of pro-Kadhafi troop movements from the south and the west.
In Benghazi, a crowd of men swarmed around the corniche overlooking the Mediterranean for the funerals of six rebels killed in Wednesday\'s fighting, pumping bullets into the air and saying prayers to honour the dead.
Dozens marched in the funeral procession in the town of Ajdabiya, 150 kilometres (94 miles) to the west, holding aloft five coffins en route to the cemetery for burial and firing bullets repeatedly into the air.
"Blood of martyrs will not be spilled in vain," "Kadhafi get out, Libyans don\'t want you" and "Kadhafi you\'re crazy" shouted the mourners.
The patchwork Libyan opposition controls swathes of eastern and western Libya including Benghazi and some oil installations. Kadhafi remains firmly in control of the capital Tripoli.
The International Criminal Court\'s prosecutor said in The Hague on Thursday that Kadhafi and key aides will be probed over allegations they committed crimes against humanity while fending off the uprising.
"We have identified some individuals with de facto or formal authority, who have authority over the security forces," that have clamped down on the rebellion, Luis Moreno-Ocampo told journalists.
"They are Moamer Kadhafi, his inner circle, including some of this sons."
The Libyan leader warned on Wednesday that "thousands" would die if the West launched a military intervention in his country, following calls by some opposition figures for Western airstrikes against the regime.
Speaking live on state television, Kadhafi warned that the "battle will be very, very long" if there is any intervention by foreign powers.
"If the Americans or the West want to enter Libya they must know it will be hell and a bloodbath -- worse than Iraq."
US Secretary of State Hillary Clinton warned that any military intervention by the West would be "controversial" in the Arab world and that the Libyan opposition wanted to be seen to be dislodging Kadhafi\'s forces on their own.
China said Thursday that Libya\'s territorial integrity must be respected and that the UN Security Council must decide future international moves as speculation mounted over potential NATO military action.
A major international operation was meanwhile under way Thursday to airlift out of Tunisia thousands of people, most of them Egyptians, stranded at the border after fleeing the bloodshed in Libya.
Refugees in their thousands have been bussed to the Djerba airport, where French transport planes equipped with medical teams have arrived to begin airlift operations, officials said.
Others were being transported to the port of Zarzis from where they will be shipped home, according to an AFP reporter at the scene.
More than 100,000 people have already left Libya to escape the vicious crackdown by Kadhafi loyalists which has left at least 1,000 dead, according to conservative UN estimates. A Libyan rights group has put the death toll as high as 6,000.
The Dutch defence ministry said meanwhile negotiations were under way for the safe return of the captures marines.
Ministry spokesman Otte Beeksma told AFP the three soldiers were captured by armed men loyal to Kadhafi in Sirte in the north of the country on Sunday as they were helping evacuate two civilians, one Dutch and another European, by helicopter.
Oil prices slipped Thursday in trading made nervous by developments in the Middle East, with Brent North Sea crude for delivery in April dipping 63 cents to $115.72 per barrel.
New York\'s light sweet crude for April shed 61 cents to $101.61.
Anger at authoritarian Arab regimes in the Middle East and North Africa continued to rage from Algeria to Yemen and has spread to the previously unaffected Gulf states of Kuwait and Oman, unnerving financial markets.
In Cairo, Egyptian Prime Minister Ahmed Shafiq resigned unexpectedly Thursday, sparking celebrations from protesters who demand a purge of the remnants of ousted president Hosni Mubarak\'s regime.
In Sanaa, it was announced that Yemeni opposition groups and religious leaders had offered embattled President Ali Abdullah Saleh plans for a smooth exit from power by the end of 2011.
In Saudi Arabia, cyber activists have created a group on Facebook calling for a "Day of Anger" on Friday in the eastern Shiite-majority region, following the arrest of a Shiite cleric.
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