Gaddafi loyalist used fighters, gunships, tanks and heavy artillery to blunt the advance of the rebels towards his bastion of Tripoli and his forces counterattacked wresting the port town of Bin Jawad in the east and advanced to encircle the eastern city of Ras Lanuf, which was captured by the rebels just two days ago.
The see-saw battles between the rebels and loyalists came as the UN named a former Jordanian foreign minister as its envoy to Libya.
The UN and the EU also announced that they were dispatching fact-finding missions to the north African nation where reports by residents speak of attacks by security forces on civilians that have triggered war crimes probe and provoked a global outrage.
Gaddafi`s fighters heavily attacked the rebel held Ras Lanuf city on the key coastal road as reports said that hundreds of people were leaving the towns fearing an onslaught by loyalists.
As prospects grew of a stalemate in battle, US media reports said that President Barack Obama was coming under heavy pressure to act to stop attacks by Gaddafi`s men on civilians.
American media reports said that US military had prepared a blue print of land, air and sea options in Libya in case Washington and its NATO allies decide to intervene there.
The options, they said, could range from arming the rebels to putting hi-tech air craft in the international air space to jam Libyan military communication to sending teams of special forces to lead and guide the rebels.
"Euphoria in anti-government strongholds is fading as Gaddafi`s forces draw line in sand on roads to key city of Sirte," al Jazeera reported from the frontline. Sirte is the hometown of the Libyan leader, who has made it a prestige to hold it.
The Arab channel reported that forces loyal to Gaddafi advanced on the rebel-held oil port of Ras Lanuf in a counter-attack that forced residents to flee and rebels to retreat.
Libyan army, al Jazeera said was pouring down the strategic Mediterranean coastal road east of the recaptured town of Bin Jawad and heading towards Ras Lanuf, 60 kms away.
Eight deaths including six rebel fighters were killed in the battle of Bin Jawad.
"For a few days the rebels made gains, but overnight it would appear that pro-Gaddafi forces are on the offensive and have taken some ground," al Jazeera correspondent reported.
Hard pressed, the rebels are asking for UN backed air strikes as Gaddafi`s Russian fighters and helicopter gunships are playing havoc with them.
The rebels also say that Gaddafi is using African mercinaries to suppress an uprising against its 41-year rule.
As the rebels and loyalists were engaged in pitched battles, the ruling authorities launched an appeal to the rebels in East for a dialogue, in the first signs of Gaddafi making overtures to his opponent.
As battles in the East, rebel forces announced that they had beaten back Gaddafi`s forces in the towns of Zawiyah, 50 kms east of Tripoli and Misrata to the east.
Misrata is being used by the rebels to launch the march on Tripoli. With the population of 300,000, the town is the largest controlled by the rebels outside their stronghold in the eastern part of the country.
The rebels claimed to have captured some commanders of Gaddafi`s forces in the battle for Misrata and threatened to put them on television.
Earlier, late last night and early this morning, heavy firing was reported in the capital, Tripoli.
"It is unclear who is carrying out the shooting or what caused it. Automatic weapon rounds, some of them of heavy calibre were fired," al Jazeera correspondent in the city reported.
She said, later a pro-government rally was taken out and authorities said the firing has been celebratory.