Libya could descend into civil war if Muammar Gadafy refuses to quit, the US said on today, its demand for his departure carrying fresh weight after news of Western military preparations.
But the veteran Libyan leader remained defiant, sending forces to a western border area amid fears that the most violent Arab revolt may grow bloodier and spark a humanitarian crisis.
His son, Saif al-Islam, warned the west against launching any military action to topple his father, and said the veteran ruler would not go into exile or step down.
"Using force against Libya is not acceptable, there's no reason, but if they want ... we are ready, we are not afraid," he told Sky television, adding: "We live here, we die here."
In Moscow, a Kremlin source suggested Mr Gadafy should step down, calling him a "living political corpse who has no place in the modern civilised world," Interfax news agency reported.
In prepared testimony to US lawmakers in Washington, US secretary of state Hillary Clinton said Libya could become a democracy or face a drawn-out civil war.
"In the years ahead, Libya could become a peaceful democracy or it could face protracted civil war," she said. US ambassador to the UN Susan Rice told US television networks Washington would keep pressure on Gaddafi until he steps down, while working to stabilise oil prices and avert a possible humanitarian crisis.
"We are going to keep the pressure on Gadafy until he steps down and allows the people of Libya to express themselves freely and determine their own future," Rice told ABC television.
But Ms Rice stopped short of saying the US was ready to impose a no-fly zone over Libya that would prevent Mr Gadafy from using aircraft against rebels fighting against him.
The destroyer USS Barry moved through the Suez Canal yesterday and into the Mediterranean. Two amphibious assault ships, the USS Kearsarge, which can carry 2,000 Marines, and the USS Ponce, are in the Red Sea and are expected to go through the canal early tomorrow.
In Paris, French foreign minister Alain Juppe sounded a note of caution about Western military thinking on Libya, saying foreign military intervention in the oil-producing country would not happen without a clear United Nations mandate.
British prime minister David Cameron said it was unacceptable that "Colonel Gadafy can be murdering his own people using airplanes and helicopter gunships."
General James Mattis, commander of US Central Command, told a Senate hearing that imposing a no-fly zone would be a "challenging" operation that would mean actual attack.
"You would have to remove air defence capability in order to establish a no-fly zone, so no illusions here," he said. "It would be a military operation -- it wouldn't be just telling people not to fly airplanes."
Analysts said Western leaders are in no mood to rush into conflict after the troubled, drawn-out involvements in Afghanistan and Iraq.
Suspicions have grown that Mr Gadafy, a survivor of past coup attempts, did not grasp the scale of the forces against him.
"All my people love me," he told the US ABC network and the BBC yesterday, dismissing the significance of a rebellion that has ended his control over much of oil-rich eastern Libya.
Rebel fighters claimed the balance of the conflict was swinging their way. "Our strength is growing and we are getting more weapons. We are attacking checkpoints," said Yousef Shagan, a spokesman in Zawiyah, only 50 km from Tripoli.
A rebel army officer in the eastern city of Ajdabiyah said rebel units were becoming more organised.
"All the military councils of Free Libya are meeting to form a unified military council to plan an attack on Gaddafi security units, militias and mercenaries," captain Faris Zwei said.
Rebels guarding a munitions store near Ajdabiyah said they feared a direct hit by Gadafy's warplanes could cause destruction for miles around.
But despite the widespread collapse of Gadafy's writ, his forces were fighting back in some regions.
A reporter on the Tunisian border saw Libyan troops reassert control at a crossing that was abandoned yesterday, and residents of Nalut, about 60 km from the border, said pro-Gadafy forces deployed to retake control there.
Across the country, tribal leaders, officials, military officers and army units have defected to the rebels. Sanctions will squeeze his access to funds.
Tripoli is a clear Gadafy stronghold, but even in the capital, loyalties are divided. Many on the streets today expressed loyalty but one man who described himself as a military pilot said: "One hundred per cent of Libyans don't like him."
There were queues outside bread shops today. Some residents said many shops were limiting the number of loaves customers could buy.
In Geneva, Russian foreign minister Sergei Lavrov called on world powers to fully implement a UN Security Council resolution on Libya. The text, adopted on Saturday, includes a freeze on Muammar Gadafy's assets and travel ban and refers his regime's brutal crackdown to the International Criminal Court.