Libyan government troops, tanks and warplanes attacked rebels on the western and eastern fronts on Tuesday, pressing their campaign to crush an insurrection against Muammar Gaddafi.
Government artillery pounded Zawiyah, the closest rebel-held city to the capital Tripoli as trapped residents cowered from the onslaught, witnesses said.
In the east, a swathe of which is under rebel control, air strikes targeted rebel positions behind the frontline around the oil town of Ras Lanuf on the Mediterranean coast.
Apparently undeterred by Gaddafi's renewed show of force, the rebel leadership said that if he stepped down within 72 hours it would not seek to bring him to justice.
Earlier, the rebels said they rejected an offer from the Libyan leader to negotiate his surrender of power. The government denied any such talks had taken place.
On the international front, foreign governments struggled to agree on a united strategy for dealing with the turmoil in Libya, which Gaddafi has ruled in an autocratic and quixotic style since seizing power in a 1969 military coup.
Gaddafi's forces launched a concerted attack with tanks and artillery on Tuesday to recapture Zawiyah, about 50 km west of Tripoli and near an important oil refinery.
Rebels still control the central square and were using loud hailers to urge residents to help defend their positions, said a witness, a Ghanaian worker who fled the town on Tuesday.
Zawiyah, the closest rebel-held town to Tripoli, has been the focus of heavy fighting for days and the exiled opposition group Libyan Human Rights Solidarity said government forces were tightening their encirclement.
"The rebels are in control but there is an exchange of fire going on," said the Ghanaian. "They are in the square."
A government spokesperson said troops were now in control but a small group of rebels was still putting up resistance.
"Maybe 30-40 people, hiding in the streets and in the cemetery. They are desperate," he told Reuters in Tripoli.