Tripoli/Washington, Apr 5 : A fierce offensive by government troops pushed Libyan rebels attempting to take the key oil town of Brega further east, as diplomatic moves to end the over month-long conflict made little headway with the regime stating that it was open to negotiate all reforms except Muammar Gaddafi's exit.
Coming under intense and renewed bombardment outside Brega, a part of which the rebels had taken over yesterday, they abandoned the town and were heading towards the eastern city of Ajdabiya, Al Jazeera reported.
Heavy fighting was reported today and opposition forces said they came under rocket and artillery fire as they attempted to fight back with mortars and rockets of their own.
The control of the oil town is vital as the capture of the oil pipeline terminus, small refinery and Mediterranean port could boost the opposition hunt for revenues.
The developments came as a NATO official claimed that 30 per cent of Libya's military capacity had been destroyed as a result of the international strikes on Gaddafi's assets.
Brig Gen Mark Van Uhm said that “we have taken out 30 per cent of the military capacity of the pro-Gadhafi forces.” On the ground, however, the rebels painted a gloomy picture of their advance and lamented the unmatched military capacity of the two sides.
“When you see this, the situation is very bad. We cannot match their weapons,” Kamal Mughrabi, 64, a retired soldier who joined the opposition army was quoted as saying as the opposition was pushed back almost 20-30 km east of Brega.
Early in the day, a coalition airstrike targeted eight government vehicles that were advancing on opposition positions, rebel officer Abdel-Basset Abibi said.
In first concrete comments from the beleaguered regime whose forces have been hit relentlessly by Western missiles and air strikes for weeks, Gaddafi's spokesman Mussa Ibrahim said that everything except the exit of the Libyan leader was negotiable.
“The kind of political system which can be implemented in the country is negotiable. We can talk about it,” he told reporters in the capital.
In a calibrated move, the US decided to drop financial sanctions against Libyan foreign minister Moussa Koussa who defected to Britain last week hoping other aides of Gaddafi would follow suit.
White House Press Secretary Jay Carney said in Washington that the US administration is in the process of identifying more people close to the authoritarian ruler to target them with sanctions.
Van Uhm, meanwhile, said that NATO's “number one priority” now was the western town of Misurata, where residents have been besieged by pro-Gaddafi troops for weeks.
He said in Misurata human beings were being used as shields in order to prevent NATO sorties to identify targets.
Meanwhile, the Libyan rebels were set to begin exporting their first shipments of oil since mid-March after a tanker capable of holding USD 100 million worth of crude docked at the eastern port of Tobruk.
There were conflicting reports that 68-year-old Gaddafi was ready to negotiate a deal with the western powers under which he remains in the country, but this was firmly rejected by the rebels.
The pro-democracy forces have made it clear that Gaddafi has to step down and there was no question of any of his sons taking his place.
Ibrahim's comment that Gaddafi would not quit came after opposition rebels flatly rejected a reported peace deal that could have seen the dictators son Seif-ul-Islam taking over.
Terming Gaddafi as the "safety valve", the Libyan spokesman said his stay in power in the country was essential for the unity of nation's tribes and peoples.
"His (Gaddafi) presence is a must to lead Libya to any transition to a democratic and transparent model," he said.
Allegations of Gaddafi's forces targeting civilians were brushed aside by Ibrahim.
"We are fighting armed militia and you are not civilian if you take up arms against the state," he said.
The Libyan strongman, after missing for weeks, made his first public appearance Monday when he greeted supporters at his Bab Al-Aziziya residence, the Libyan national TV reported.
Simultaneously, his son Seif, long seen as Gaddafi's successor, gave an interview to BBC in a Tripoli hotel where he said the defected foreign minister Moussa Koussa had not betrayed Gaddafi, but had left the country for health reasons.
Seif said Koussa was being pressurised into making allegations against Gaddafi and Libya in an effort to secure immunity from prosecution, BBC reported.
Gaddafi's son said the Libyan Foreign Minister was allowed to leave the country and denied that Koussa knew incriminating details about the Lockerbie bombings and other details.
In Washington, the Obama Administration remained non-committal on recognising the Libyan rebels as the de-facto government, even as Italy joined France and Qatar in doing so.
"We have taken a lot of steps to engage in dialogue with opposition leaders. We are part of the contact group, which is very much engaged in the process of assessing the opposition and helping plan for or assisting and advising the opposition and planning for a post-Qaddafi Libya," White House Press Secretary Jay Carney said.
"But we continue to take measures that we believe are in America's national interest, national security interest, in terms of our due diligence and assessing the opposition and assessing the kind of assistance we can provide to the opposition," he said when asked if the US has plans to recognise the rebels as the de-facto Libyan government.
But, AP reported that the Obama administration has sent an envoy to the Libyan opposition for holding talks with those leading the rebellion.
State Department spokesman Mark Toner said, "Nothing to announce here, but we continue to work closely with the opposition. We continue to advise them and communicate with them regularly. But nothing new on that front."
"We are only weeks since the very beginning of any unrest in Libya at all; only a few weeks since the kinetic engagement of NATO and only a little bit longer than that since the US took action unilaterally and multilaterally on a slew of sanctions and that sort of thing," he said.
After a series of rapid advances, the rebels have witnessed retreats in the recent weeks, faced with a stronger military.
After the rebels abandoned Brega today, a rebel officer was quoted as saying by Al Jazeera that the two sides had battled inside the city until nightfall yesterday and then the rebels moved back to the outskirts.
Yesterday, opposition fighters had regained ground they had given up the day before.
The channel said that the rebels had not experienced such a push by Gaddafi forces for a few days.
However, a spokesman for the opposition's National Council in Benghazi, Mustafa Gheirani, said that while "setbacks" had been suffered, the opposition would fight on.
"There is no revolution without setbacks. But the people will win. Gaddafi cannot rule Libya with his machine - his militias and his mercenaries ... We are committed to fighting this tyrant, and either we will drive him out or he will rule a country with no people in it," he said.
Britain, meanwhile, said that European Union diplomats in Brussels are discussing proposals to offer family members and close aides of Gaddafi a lifting of restrictions on their assets, cash and travel if they withdraw support to the regime. PTI