Eyewitnesses said Gadhafi loyalists - including snipers - reportedly fired on demonstrators on Friday.
Residents of Libya's eastern Tajoura district spread concrete blocks, large rocks and even chopped-down palm trees as makeshift barricades to prevent the SUVs filled with young men wielding automatic weapons from entering their neighborhood - a hotspot of previous protests.
The international community toughened its response to the bloodshed, while Americans and other foreigners were evacuated from the chaos roiling the North African nation.
The U.N. Security Council met in an urgent session on Saturday to consider sanctions to punish Libya, including an arms embargo, a travel ban and an asset freeze.
U.N. Secretary-General Ban Ki-moon said some estimates indicate more than 1,000 people have been killed in less than two weeks since the protests broke out in Libya.
President Barack Obama signed an executive order Friday freezing assets held by Gadhafi and four of his children in the United States. The Treasury Department said the sanctions against Gadhafi, three of his sons and a daughter also apply to the Libyan government.
Meantime, thousands of evacuees from Libya have reached ports across the Mediterranean, and among them were some U.S. citizens who were ferried out of Tripoli to Malta.
The Associated Press contributed to this report.