It's the latest setback for the rebel fighters, who just last week had controlled the entire eastern half of the country.
The Arab League asked the U.N. Security Council to impose a no-fly zone over Libya to protect the rebels, increasing pressure on the U.S. and other Western powers to take action that most have expressed deep reservations about.
The 22-nation league held an emergency meeting in Cairo and asked the United Nations "to carry out its responsibility."
The Obama administration has said a no-fly zone may have limited impact, and there is far from international agreement on it.
It would require U.S. and possibly allies' aircraft to first attack Libya's anti-aircraft defenses, a move tantamount to starting war.
Gadhafi has warned the United States and other Western powers not to intervene, saying thousands in his country would die and "we will turn Libya into another Vietnam."
Also on Saturday, a cameraman for the pan-Arab satellite station Al-Jazeera became the first journalist slain in the uprising when he and his crew were hit by an ambush.
The station said Ali Hassan al-Jaber was killed in the Hawari area near Benghazi, the headquarters of the rebellion.
The Associated Press contributed to this story.