A sustained bombardment by Muammar Gaddafi's planes and tanks beat back rebels from the Libyan oil port of Ras Lanuf, and insurgents warned the uprising could be crushed completely without a no-fly zone.
But the Arab League, meeting on Saturday, was expected to follow the European Union, the United States and NATO and fall short of calling for a no-fly zone to be imposed on Libya.
The small coastal town of Ras Lanuf and the oil terminal there have changed hands several times over the last week as Libyan government troops, backed by tanks and air power have duelled with rebels armed with light weapons, heavy machineguns and outdated anti-aircraft guns mounted on pick-up trucks.
But warfare on Libya's flat desert terrain heavily favours the use of heavy armour and airpower. The Libyan army is also better trained and disciplined than the rag-tag, though enthusiastic, rebel force.
Libyan troops launched an amphibious assault on Ras Lanuf early on Friday, backed by tanks and warplanes. But after a day of skirmishing in which oil storage tanks were blown up sending black columns of smoke into the sky, the rebels retreated east.
"We're out of Ras Lanuf. They've beaten us back with bombardment," said rebel Colonel Bashir Abudl Qadr. "We've moved back 20 km (12 miles) from last night because we are also afraid the refinery will explode."