Gadhafi regime takes Zawiya and oil town

ZAWIYA, Libya -- Moammar Gadhafi's regime showed growing confidence Friday after retaking this strategic city near Tripoli following days of relentless shelling against protesters-turned-rebels as it strengthened its hold on the capital and surrounding areas.

Government forces also captured a key oil town in the east and fought to dislodge rebels who took refuge among towering storage containers of crude oil and gas in nearby facilities.

Zawiya's main square, which had been a key center of resistance to the west of the capital, bore the scars of battle and the streets were lined with tanks as loyalists waving green flags rallied amid a heavy presence of uniformed pro-Gadhafi troops and snipers.

With Gadhafi's men also on the march against rebels in the east, Western nations appeared in disarray over how to stop the bloodshed.

President Barack Obama said a no-fly zone over Libya to protect the civilian population from the Gadhafi regime's fighter jets remains a possibility as "we are slowly tightening the noose" around Gadhafi, but he stopped short of moving toward military action.

The European Union, meanwhile, said a no-fly zone would need diplomatic backing from international organizations like the Arab League, which was to discuss situation in Libya on Saturday in Cairo.

The capture of Zawiya, a coastal city of about 200,000 people that is located near an oil port and refineries, seals off a corridor around the capital and solidifies the government's control over the western third of the country to the border with Tunisia.

Pro-Gadhafi forces also appeared to be turning the tide in the country's east, bottling up a ragtag force of rebels at the key oil port of Ras Lanouf in a powerful offensive as the conflict is increasingly shaping into a potential civil war.