TRIPOLI: Libyan strongman Moamer Kadhafi warned on Wednesday 'thousands' would die if the West intervened to support the uprising against him, as rebels repulsed a huge attack by his forces on an eastern town.
Kadhafi's speech at a ceremony of loyalists in the capital Tripoli came as the UN refugee agency made a plea for hundreds of planes to airlift "acres of people" waiting in freezing conditions to cross the Libyan border into Tunisia.
As two US warships steamed through the Suez Canal into the Mediterranean towards Libya, NATO allies were still split Wednesday on whether to unleash their military might to stop Kadhafi's reprisals against rebels.
Libyan rebels who control part of the country's east called on the United Nations to order air strikes against mercenaries fighting for the 68-year-old leader, who seized power in a 1969 coup.
"We're calling on the UN or any responsible international body for air strikes on the places and strongholds of the mercenaries," spokesman for the rebels, Abdel Hafiz Ghoqa, told reporters in the eastern city of Benghazi.
"We're calling for specific attacks on these strongholds and mercenary forces," he added.
But 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."
Addressing "our friends in Europe and the West," he said it is "not at all in their interest to shake the Libyan regime."
The veteran leader in an impassioned speech that lasted two-and-a-half hours, denied there had been any peaceful demonstrations since the uprising broke out on February 15 and challenged calls for him to step down, saying he has "no real power."
He again blamed Al-Qaeda for the challenge to his 41-year iron-fisted rule, saying the objective was to control Libya's land and oil.
"This is impossible, impossible. We will fight to the end, to the last man, the last woman ... with God's help."
The ceremony was aired live shortly after rebels said they fought intense battles with forces loyal to Kadhafi who tried to retake the key eastern oil port of Brega, leaving at least 10 people dead.
A huge blast rocked the coastal town and plumes of smoke streaked the sky, an AFP reporter said, as clashes continued hours after the opposition said they had repelled one of the biggest pro-Kadhafi counteroffensives yet.
The rebels said they were surrounding regime fighters who were in the university area and at the gates of the Sirte oil company. Smoke rose from shell fire and heavy machine gun fire rattled through Brega.
"Now they're limited to the university and the gates of the oil company. Their ammunition is running out. They're firing randomly. We'll take these positions by nightfall," said one rebel fighter who gave his name as Mohammad.
As fighting raged, an AFP reporter at one of the two hospitals in Brega, which is 200 kilometres (125 miles) southwest of Benghazi, saw the bloodied bodies of four young men in a morgue, while rebels said at least 10 people had died.
Libyan warplanes earlier Wednesday also launched airstrikes on Ajdabiya, 40 kilometres from Brega, targeting either an arms dump or a military base taken over by opposition forces, they said.
UNHCR spokeswoman Sybella Wilkes told AFP in Geneva that the situation on the Libya-Tunisia border was dire.
"My colleague on the ground say that acres of people, as far as you can see, are waiting to cross," she said.
"They are outdoors in the freezing cold, under the rain, many of them have spent three or four nights outside already," said the spokeswoman from the Office of the High Commissioner for Refugees, appealing for "tens if not hundreds of planes" to help end the gridlock.
France later said it would send heavy-lift planes and a ship to create a land and sea bridge to ferry 5,000 Egyptian refugees home from the Tunisian border.
More than 100,000 people have already left Libya to escape a vicious crackdown by Kadhafi loyalists which has left at least 1,000 dead, according to conservative UN estimates.
A spokesman for the Libyan Human Rights League said Wednesday the toll could even be as high as 6,000.
"Victims in the whole country were 6,000," Ali Zeidan told reporters in Paris, adding that this included 3,000 in the capital Tripoli, 2,000 in Benghazi and 1,000 in other cities.
The two US warships entered the Mediterranean late afternoon Wednesday, the Suez Canal Authority said.
"The USS Kearsage and the USS Ponce have entered the Mediterranean," the authority said in a statement.
The Kearsage amphibious ready group, with about 800 marines, a fleet of helicopters and medical facilities, could support humanitarian efforts as well as military operations.
"We're certainly moving assets to be closer (to Libya)," a US defence official told AFP in Washington on Tuesday. "A ship like the Kearsage is capable of many types of missions."
The United States and Britain have raised the possibility of creating a no-fly zone to prevent Kadhafi from launching air raids against his own people, with London claiming that a UN mandate was not necessarily needed.
France however has insisted any military action would require UN backing.
"There is no unanimity within NATO for the use of armed forces," US Defence Secretary Robert Gates said in Washington.
Anger at authoritarian Arab regimes in the Middle East and North Africa raged from Algeria to Yemen and has spread to the previously unaffected Gulf states of Kuwait and Oman, unnerving financial markets around the world.
Stock markets in the Gulf states dived on Wednesday as they continued to be impacted by fear from the unrest despite soaring oil prices.
New York oil prices briefly hit $101 on Wednesday while safe-haven gold struck another record high point.
New York's light sweet crude for April rallied as high as $101.47 per barrel. It later stood at $100.34, up 71 cents from Tuesday's closing level.
London Brent North Sea crude for delivery in April gained ten cents to $115.52 per barrel.
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