Libyan leader Muammar Gaddafi's forces pressed closer to the opposition stronghold of Benghazi while diplomatic efforts to impose a no-fly zone to help the rebels made little headway.

France pressured G8 foreign ministers at a meeting in Paris on Monday to agree action on Libya and back its efforts to speed up a UN Security Council decision on imposing a no-fly zone, but hit pushback from partners like Germany.

German Foreign Minister Guido Westerwelle called for urgent talks in the Security Council for targeted sanctions on Gaddafi's government, but voiced opposition towards military action.

'We are very sceptical about a military intervention and a no-fly zone is a military intervention,' he told reporters after the dinner with G8 counterparts.

A divided Security Council also discussed the idea of authorising a no-fly zone, but no consensus emerged among its 15 members and Russia said it had questions about the proposal.

'Fundamental questions need to be answered, not just what we need to do, but how it's going to be done,' Russian ambassador Vitaly Churkin said in New York.

Meanwhile, Libyan government artillery and tanks re-took the small town of Zuwarah, 120 km west of Tripoli after heavy bombardment, resident Tarek Abdallah said by telephone.

Perhaps more significantly, they were shrinking the swathe of eastern Libya still held by revolutionary forces.

They captured the important eastern oil terminal town of Brega late on Sunday, and on Monday Libyan jets flew behind rebel lines to bomb Ajdabiyah, the only sizeable town between Brega and the rebel stronghold of Benghazi.

Ajdabiyah commands roads to Benghazi and Tobruk that could allow Gaddafi's troops to encircle Libya's second city and its 300,000 inhabitants.

Soliman Bouchuiguir, president of the Libyan League for Human Rights, said in Geneva that if Gaddafi's heavily armed forces broke through to attack Benghazi, there would be 'a real bloodbath, a massacre like we saw in Rwanda'.

Saturday's endorsement from the Arab League satisfies one of three conditions set by the Western Nato alliance for it to police Libyan air space, that of regional support. The other two are proof its help is needed and a Security Council resolution.

'Now that there is this Arab League statement, we do hope that it's a game changer for the other members of the council,' French UN ambassador Gerard Araud said in New York.

Lebanese ambassador Nawaf Salam, sole Arab representative on the council, said Lebanon wanted it to act as fast as possible.

'We think it is not only a legitimate request, it is a necessary request,' he said. 'Measures ought to be taken to stop the violence, to put an end to the situation in Libya, to protect the civilians there.'

UN Deputy High Commissioner for Human Rights Kyung-wha Kang said in Geneva that Gaddafi's government had 'chosen to attack civilians with massive, indiscriminate force'.

News of humanitarian suffering or atrocities could be taken as a sign that help is needed. But while Human Rights Watch has reported a wave of arbitrary arrests and disappearances in Tripoli, hard evidence is so far largely lacking.-Reuters