A Libyan army unit loyal to dictator Col. Moammar Gadhafi attacked antigovernment protesters holed up in a mosque in a key city west of the capital Thursday, blasting a minaret with anti-aircraft missiles and automatic weapons, a witness said.
Protesters who had been camped inside and outside the mosque suffered heavy casualties in the attack on Zawiya, 50 kilometers west of Tripoli, the witness said, but he couldn't provide an exact toll.
The witness, who spoke on condition of anonymity for fear of reprisals, said the 9 a.m. attack came a day after an aide to Col. Gadhafi, identified as Abdullah Megrahi, came to the city and warned the protesters to "leave or you will see a massacre."
"We told him we are not leaving, either death or victory," the witness said. He added that protesters had detained seven uniformed men who belonged to the armed forces responsible for Thursday's attack.
Libyan state television reported Thursday that Col. Gadhafi would address the nation shortly.
European Union officials said Thursday they were preparing a military contingency plan in response to the violence unleashed by the Libyan regime.
The officials said the EU has had no real contact with Col. Gadhafi's government. On the possibility of an EU military response to the violence, one official said, "We need to be prepared for this type of scenario."
Col. Gadhafi's son on Thursday denied the regime had launched airstrikes against Libyan cities, claiming reports of the number of people killed in security forces' crackdown on protesters have been exaggerated.
The comments by Seif al-Islam Gadhafi came as the Libyan regime fought to maintain control after several major cities and towns in the country's east, as well as some close to the capital, fell to the rebellion against the longtime leader.
Seif al-Islam Gadhafi insisted the death toll caused by Libyan security forces has been limited. Italy's Foreign Minister Franco Frattini said estimates of some 1,000 people killed in the violence in Libya were "credible," although he stressed the information was incomplete.
Meanwhile, one of Col. Gadhafi's closest aides, Ahmed Gadhaf al-Dam, said he has defected to Cairo in protest of the regime's fierce crackdown on demonstrators.
Mr. Gadhaf al-Dam, a cousin of Col. Gadhafi, said in a statement that the crackdown has seen "grave violations to human rights and human and international laws." He said he left Libya to Egypt "in protest and to show disagreement." Mr. Gadhaf al-Dam, who arrived in the Cairo several days ago, is a member of the Libyan leader's inner circle, handling Libyan-Egyptian relations.
Forces loyal to Col. Gadhafi imposed rough order in Libya's increasingly fearful capital, witnesses said, that stood in sharp contrast to rebel gains in much of the oil-rich country.
Gunshots echoed through the night in Tripoli as Col. Gadhafi clung to power even as the international community discussed ways to isolate him with sanctions. More territory slipped from his control, and rebels began to set up rudimentary governments in outlying areas under their sway. "No one should count him out, but momentum isn't going his way," a U.S. official said.
The chaos that has consumed Libya since protesters last week began pushing for Col. Gadhafi's ouster has spawned an array of security concerns—over oil supplies, the safety of tens of thousands of foreign workers there and the risks posed by the weapons in Col. Gadhafi's remaining arsenal.
Oil prices surged over fears about the security of supplies from Libya, a major oil producer. Prices for light, sweet crude for April delivery—the main U.S. oil contract—at one point in the trading day hit $100 a barrel for the first time in more than two years.
The U.S., China, Turkey and several European nations struggled to bring home citizens stranded in Libya, where an estimated 100,000 foreigners work in industries including oil and construction. Airplanes sent from France and the Netherlands circled Tripoli's airport but had no clearance to land and turned back.
Fears also arose in Washington that Libya's regime hasn't destroyed significant stockpiles of mustard gas and other chemical-weapons agents. Tripoli also has stocks of aging Scud B missiles.
President Barack Obama sharply condemned the violence. "The suffering and bloodshed is outrageous and it is unacceptable," he said in his first public comments on the growing unrest in Libya. He said the Libyan government must "face the cost of continued violations of human rights."
Mr. Obama said Secretary of State Hillary Clinton would go to Geneva for international talks aimed at finding ways to halt the violence. He said his administration would draw up a full range of options to respond to the crisis.
The White House emphasis is on sanctions, unilateral and multilateral, which could include freezing Libyan government assets, halting foreign investment and imposing travel restrictions on officials. U.S. and other officials are looking at imposing a no-fly zone, but it appears less likely.
France and Germany called for the European Union to consider suspending economic, commercial and financial relations with Libya.
Opponents of Col. Gadhafi's regime said Wednesday they had gained control of the city of Misrata, which lies closer to Tripoli than any of the cities so far seized by antiregime forces.
In the eastern coastal city of Baida, where opposition forces overcame pro-Gadhafi fighters on Tuesday, sheiks, academics and businessmen met in a domed meeting hall to discuss how to oversee security, distribute food and fuel and recollect weapons spread widely amid the uprising.
"Everything is in chaos now," said Hamdy Yaqoub, a professor of environmental science at Omar Mukhtar University, an elder at the meeting. "This revolution started on Facebook, as nothing, with some kids. No one really thought we'd have to come to work on Monday and figure out how to rebuild our country."
In Tripoli, residents reached by phone described a city paralyzed by fear. Pro-Gadhafi groups have set up roadblocks around the capital, residents said Wednesday, adding that groups of plainclothes security agents are stepping up their hunt for those considered disloyal to the regime.
One resident said his friend had gone into hiding after group of plainclothes security agents in a brown Toyota pickup truck arrived at his home to arrest him. The friend, this person said, had been making celebratory phone calls to friends and family.
Many who participated in antiregime demonstrations Sunday in Tripoli said they were scared to go back out on the streets. Some said they have received anonymous text messages saying they would be shot if they start another demonstration. Overnight Wednesday, residents said heavy gunfire could be heard in the upscale Ben Ashoura neighborhood, home to many diplomatic buildings.
The melting away of Mr. Gadhafi's government—at least a half-dozen have defected or quit in recent days—has added to the relative power of Libya's many tribes, which are spread across the country with each claiming the fealty of thousands of members.
Since seizing power in 1969, Col. Gadhafi has maintained his rule in part by dividing and conquering Libya's tribes, and by periodically overhauling the government to deprive potential political rivals a base. The resulting power structure is a hodgepodge of ineffective bureaucracies and competing organizations.
"What he created was a system of chaos, committees on top of committees reporting to committees and overseen by thugs," said Hafed al-Ghwell, a Libyan opposition activist. "My biggest fear is that you have no real institutions on a national level that can impose order, and what we are looking at is the prospect of a collapsed state on the Mediterranean Sea—with oil, no central command or institutions able to stand up and help the transition into a civilian democratic rule."
Above the technocrats and bloated rolls of civil servants sit "revolutionary committees" — part political commissars, part enforcers of the leader's law and order, according to political analysts. The committees, populated largely with Col. Gadhafi's clan members, are responsible for ensuring citizens' loyalty and promoting the leader's ideology.
The groups exist on local and regional levels and their members receive generous benefits, including housing and cars. They may carry weapons, and in ways hold more street-level power than military officers.
Col. Gadhafi's tribe, the Gadhafa, dominate parts of the armed forces. They have spent years destroying the base within the military that the rival Warfalla tribe once had, say Libyans with knowledge of the situation.
But by wiping out allegiances to anyone besides himself, Col. Gadhafi increased Libya's already strong tribal affiliations. That leaves Libya with few independent figures prepared to step into any power vacuum or engage in coalition-building.
—Tahani Karrar-Lewsley, Jay Solomon, Adam Entous, James Herron, Laurence Norman, Matthew Dalton and the Associated Press contributed to this article.