Pro-Gadhafi forces fight Libya's rebels

TRIPOLI, Libya -- International pressure on Moammar Gadhafi to end a crackdown on opponents escalated Monday as his loyalists fought rebels holding the two cities closest to the capital and his warplanes bombed an ammunition depot in the east.

The U.S. moved naval and air forces closer to Libya and said all options were open, including patrols of the North African nation's skies to protect its citizens from their ruler.

France said it would fly aid to the opposition-controlled eastern half of the country. The European Union imposed an arms embargo and other sanctions, following the lead of the U.S. and the U.N. The EU was also considering the creation of a no-fly zone over Libya. And the U.S. and Europe were freezing billions in Libya's foreign assets.

"Gadhafi has lost the legitimacy to govern, and it is time for him to go without further violence or delay," U.S. Secretary of State Hillary Rodham Clinton said. "No option is off the table. That of course includes a no-fly zone."

Gadhafi, who in the past two weeks has launched the most brutal crackdown of any Arab regime facing a wave of popular uprisings, laughed off a question from ABC News about whether he would step down as the Obama administration demands.

"My people love me. They would die for me," he said.

ABC reported that Gadhafi invited the United Nations or any other organization to Libya on a fact-finding mission.

The turmoil in the oil-rich nation roiled markets for another day. Libya's oil chief said production had been cut by around 50 percent, denting supplies that go primarily to Europe.

The country provides 2 percent of the world's oil, but concerns the unrest will spread to other oil-rich nations has sent oil prices rising worldwide.

On Monday, pro-Gadhafi forces retook control of the western border crossings with Tunisia that had fallen under opposition control and they bombed an ammunition depot in the rebel-held east, residents in the area said. The Libyan Defense Ministry denied the bombing.

Regime forces also moved to tighten their ring around two opposition-controlled cities closest to the capital Tripoli -- Zawiya and Misrata -- where the two sides are locked in standoffs.

Several residents of the eastern city of Ajdabiya said Gadhafi's air force also bombed an ammunition depot nearby held by rebels. One resident, 17-year-old Abdel-Bari Zwei, reported intermittent explosions and a fire, and another, Faraj al-Maghrabi, said the facility was partially damaged. The site contains bombs, missiles and ammunition -- key for the undersupplied opposition military forces.

State TV carried a statement by Libya's Defense Ministry denying any attempt to bomb the depot. Ajdabiya is about 450 miles (750 kilometers) east of Tripoli along the Mediterranean coast.

Gadhafi supporters said they were in control of the city of Sabratha, west of Tripoli, which has seemed to go back and forth between the two camps in the past week. Several residents told the AP that protesters set fire to a police station, but then were dispersed. Anti-Gadhafi graffiti -- "Down with the enemy of freedom" and "Libya is free, Gadhafi must leave" -- were scrawled on some walls, but residents were painting them over.

There were signs of economic distress in the country, with prices skyrocketing and long lines forming for bread and gasoline.

Global efforts to halt Gadhafi's crackdown escalated Monday.

In Washington, the Pentagon said it was moving some naval and air forces closer to Libya in case they are needed. The U.S. has a regular military presence in the Mediterranean and farther to the south has two aircraft carriers in the Persian Gulf area.

The U.S. Treasury Department said that at least $30 billion in Libyan assets have been frozen since President Barack Obama imposed sanctions on Libya last week.

France promised to send two planes with humanitarian aid the eastern opposition stronghold city of Benghazi, hoping to give it the momentum to oust Gadhafi. The aid to included medicine and doctors, would be the first direct Western help for the uprising that has taken control of the entire eastern half of Libya. French Prime Minister Francois Fillon said it was the start of a "massive operation of humanitarian support" for the east and that Paris was studying "all solutions" -- including military options.

The EU slapped its own arms embargo, visa ban and other sanctions on Gadhafi's regime, following sanctions imposed by the U.S. and the U.N. in the past week. And Europe was also considering the imposition of a no-fly zone over Libya to prevent any air attacks by the regime on rebellious citizens.

Clinton met in Geneva with foreign ministers from Britain, France, Germany and Italy to press for tough sanctions on the Libyan government.