Libyan leader Moamer Kadhafi suffered a major blow with the defection of his foreign minister even as his forces again proved too strong for the rebels\' rag-tag army.
Kadhafi\'s forces overran the towns of Ras Lanuf, Uqayla and Brega, rebels reported, scattering the outgunned insurgents as world powers mulled arming the fighters to help them oust the Libyan strongman.
But these reverses were perhaps offset when Foreign Minister Mussa Kussa became the most senior figure to defect from the Kadhafi regime since the uprising against his iron-clad 42-year rule erupted more than six weeks ago.
"We can confirm that Mussa Kussa arrived at Farnborough Airport on 30 March from Tunisia," the British foreign ministry said. "He travelled here under his own free will. He has told us that he is resigning his post."
The New York Times, meanwhile, reported that the United States and Britain had inserted covert intelligence agents into Libya to make contact with rebels and to gather data to guide coalition air strikes.
The White House refused to comment on the apparent shadow war and also declined to discuss another report that President Barack Obama had signed a secret order allowing Central Intelligence Agency operations in the country.
A senior US official did, however, welcome the defection of Kussa, interpreting his flight as a sign that Kadhafi\'s inner circle was beginning to crumble.
"This is a very significant defection and an indication that people around Kadhafi think the writing\'s on the wall," the source said.
Militarily, though, it was another terrible day for the rebels as superior firepower from Kadhafi\'s forces saw them driven back 200 kilometres (125 miles), giving up most of the ground their recent advances had secured.
AFP reporters and rebel fighters said Kadhafi\'s troops swept through the oil town of Ras Lanuf, 300 kilometres (185 miles) east of Kadhafi\'s hometown Sirte, soon after dawn, blazing away with tanks and heavy artillery fire.
But later, an air strike about 10 kilometres (6.5 miles) west of Ajdabiya, where rebels are sheltering, sent a huge plume of smoke rising into the sky and brought cries of jubilation from the rebel fighters, who had been calling for renewed air support.
"We want two things: that the planes drop bombs on Kadhafi\'s tanks and heavy artillery; and that they (the West) give us weapons so we can fight," rebel fighter Yunes Abdelghaim told AFP.
The 27-year-old, who was holding a Russian AK-47 assault rifle and French flag, said it seemed as if the coalition had halted its air strikes for two days coinciding with a London conference on the Libyan crisis.
By nightfall, the town of Brega, which also has an oil refinery, was in the hands of loyalists, rebels said, and the sound of artillery fire could be heard on the outskirts of Ajdabiya.
Explosions shook an eastern suburb of Tripoli overnight as warplanes staged a raid on the Libyan capital, a witness told AFP by telephone.
NATO began to take command of Libyan air operations from a US-led coalition as warplanes and other assets from several allies came under the military organisation\'s control.
"This is a phased process, which will be completed as soon as all allies and partners have transferred authority for their assets," NATO spokeswoman Oana Lungescu told AFP.
As the insurgents were being routed, British Prime Minister David Cameron said in London that the option of arming the rebellion had not been ruled out, putting him more in line with Obama and the Americans.
Asked in parliament what Britain\'s policy was on arming the rebels, given the existence of a United Nations arms embargo on Libya, Cameron replied: "We do not rule it out but we have not taken the decision to do so."
French Foreign Minister Alain Juppe had set the tone at the London conference when he said on Tuesday that France was prepared to hold discussions on delivering arms to the rebels.
Russian Foreign Minister Sergei Lavrov said however Moscow believed that foreign powers did not have the right to do so under the mandate approved by the UN Security Council.
And in Beijing, China\'s President Hu Jintao warned French President Nicolas Sarkozy that air strikes on Libya could violate the "original intention" of the UN resolution authorising them if civilians suffer.
US Secretary of State Hillary Clinton said that although UN sanctions prohibit the delivery of arms to Libya, the ban no longer applies.
"It is our interpretation that (UN Security Council resolution) 1973 amended or overrode the absolute prohibition on arms to anyone in Libya, so that there could be a legitimate transfer of arms if a country should choose to do that," she said.
A spokesman for the rebel Transitional National Council, Mustafa Ghuriani, told reporters "it would be naive to think we are not arming ourselves" to match the weaponry deployed by Kadhafi loyalists.
But he declined to confirm or deny that France and the United States were offering to supply arms, saying only that unspecified "friendly nations" were backing the rebels.
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