Despite rebel claims to the contrary, reports indicate that Colonel Gaddafi’s forces have overwhelmed the strategically important eastern town of Ajdabiyah.
The offensive on Tuesday hammered rebel positions with air strikes, missiles, tanks and artillery.
One resident told reporters “there’s complete terror there now, everyone is frightened.”
The assault paves the way for an all-out government offensive on the rebel stronghold of Benghazi. On Libyan TV on Tuesday a military spokesman said that air strikes have already started.
He also said Gaddafi’s army has reached the frontier with Egypt and that Benghazi is completely surrounded.
Most residents have now reportedly fled the city, leaving it in the hands of rebels who are gearing up for an all out attack, which, if successful, could prove to be the decisive factor for the control of Libya.