The rebels, now including army forces who defected from the government long with their tanks, machine guns and anti-aircraft guns, reportedly fought back pro-Gaddafi troops attacking from six directions and using the same weapons, Al Jazeera reported.
A resident of Zawiya reportedly told the Associated Press by telephone late Monday that fighting started in the evening and intensified after dusk when troops loyal to Gaddafi attacked the city.
"We were able to repulse the attack. We damaged a tank with an RPG. The mercenaries fled after that," said the resident. He said Gaddafi had called the city's influential tribal leader, Mohammed al-Maktouf, and warned him that if the rebels did not leave the main square by early Tuesday, they would be hit by fighter jets.
Meanwhile, a senior U.S. diplomat has called Muammar Gaddafi “delusional” and "unfit to lead” as the Libyan leader responded to international pressure to step down with bombing raids and escalating military action against anti-government rebels.
U.S. ambassador to the United Nations, Susan Price, spoke in response to a Gaddafi interview with foreign journalists in which he dismissed claims of deadly attacks, claiming “all my people are with me, they love me all. They will die to protect me, my people.”
Rice said he “sounds, just frankly, delusional,” and his ability to laugh off questions from journalists “while he is slaughtering his own people, it only underscores how unfit he is to lead and how disconnected he is from reality.”
Gaddafi's troops attacked an oil refinery in central Libya and cities on either side of the country on Monday, and his warplanes bombed a weapons depot in the east.
The two Libyan Air Force MiG-23s took off from an air base near Surt, 200 miles east of Tripoli, and hit three targets before being repelled by rebel anti-aircraft fire, reports the New York Times. They then attacked locations in Ar-Rajah, south of Benghazi, an opposition-controlled city in the east.
Gaddafi's escalation of force, which risked bringing the country closer to a state of civil war, comes as the international community increases its support for Libyan opposition forces and pushes Gaddafi to relinquish his four-decade grip on power.
The United States and Europe have frozen billions of dollars in Libya's foreign assets, the European Union has imposed an arms embargo among other sanctions and France said it would fly aid to the opposition-controlled eastern half of the country.
A Pentagon official said Monday the United States was repositioning naval and air forces around Libya, and U.S. Secretary of State Hillary Clinton said the United States was prepared to offer "any kind of assistance" to help Libya's rebel forces overthrow the Gaddafi regime.
"We have planners working and various contingency plans and I think it's safe to say as part of that we're repositioning forces to be able to provide for that flexibility once decisions are made ... to be able to provide options and flexibility," Col. David Lapan, a Pentagon spokesman, said.
Discussions on a range of possible military options began last week between British and U.S. officials at the Pentagon, according to the Guardian. Officials told the paper that the support of U.S. and British armed forces might be required to protect corridors for humanitarian relief into Libya through Tunisia and Egypt.
Western officials told the paper that any military intervention in the unfolding conflict would require the approval of the Security Council. Russia and China, who both hold a veto, have voiced their opposition to any outside interference.
Officials from the Obama administration and European allies have been discussing the possibility of enforcing a no-fly zone over Libya in an effort to halt Gaddafi's attacks on civilians. Hundreds if not thousands of civilians have been killed by Gaddafi's forces and pro-government mercenaries since the uprising began in mid February.
British Prime Minister David Cameron told MPs Monday that Britain and its allies were considering using fighter jets to impose a no-fly zone and patrol and shoot down Libyan aircraft attacking opposition forces.
"We do not in any way rule out the use of military assets. We must not tolerate this regime using military forces against its own people," Cameron said.
When asked if the West might supply Libyan opposition forces with weapons, Cameron replied: "It's certainly something we should be considering."
Secretary of State Hillary Clinton said Monday that "no option was off the table," including the possibility of Gaddafi seeking refuge in a safe haven, such as in Zimbabwe.
"I was almost rendered speechless by the idea of him and Mugabe together," Clinton reportedly told a news conference in Geneva, but that the goal is for an end to the violence, "and if the violence could be ended by his leaving ... that might be a good thing."
"We have joined the Libyan people in demanding that qaddafi must go - now -- without further violence or delay," Clinton said Tuesday in testimony before the House Committee on Foreign Affairs, according to CBS. "We are taking no options off the table so long as the Libyan government continues to turn its guns on the Libyan people."
On Tuesday, Cameron insisted the Libyan people must not be left to their fate, as Shiites in the south of Iraq were when their rebellion against Saddam Hussein in the wake of the 1991 Gulf War was brutally quashed.
"I think there are some very immediate dangers of what Colonel Gaddafi could do to his own people and we should be planning now to think what we can do to try to stop that," Cameron said Tuesday, according to the Telegraph.
London's Telegraph reports that the West is considering using force against Gaddafi's regime out of fear that the defiant and often unstable leader has access to chemical weapons that could be used against civilians. The Telegraph quoted an unnamed senior British government source who accuses Libya of still having stocks of mustard gas chemicals.
"Despite a promise in 2003 to give up weapons of mass destruction, Gaddafi is thought to have retained as much as 14 tons of the chemicals required to create mustard gas. The stocks are said to be stored in secret secure facilities in the Libyan desert. The chemicals would need to be mixed and loaded into shells before they could be used as weapons, but are 'still a concern,' said a senior British government source. 'We want to make sure they’re destroyed,'" reports the Telegraph.
Meanwhile, an Associated Press reporter who reached Zawiya, 30 miles west of Tripoli, confirmed Sunday that anti-Gaddafi rebels were in control of the city center.
They had deployed army tanks and anti-aircraft guns mounted on pickup trucks, according to the reporter, but were surrounded by pro-Gaddafi forces, also backed by tanks and anti-aircraft guns.
By all reports, Gaddafi still holds the most of Tripoli, home to two million of Libya's 6.5 million people. On Sunday, state banks began handing out the equivalent of $400 per family in an effort to boost support for Gaddafi in the capital.
But Zawiya, a town of 200,000 close to an oil port and refineries, is the nearest population center to Tripoli to fall into the opposition hands. Police stations and government offices inside the city have been torched and anti-Gaddafi graffiti was everywhere.
Gaddafi has launched by far the bloodiest crackdown in a wave of anti-regime uprisings that continue to sweep the Arab world.
In Oman on Tuesday, troops reportedly fired in the air to disperse crowds demanding jobs and political reforms in the northern port of Sohar. One protester was wounded by the gunfire, Reuters reported.
Thousands of demonstrators took to the streets of the Yemeni capital Sana’a demanding an end to President Ali Abdullah Saleh’s three-decade rule despite his recent offer to form a new government, Al Jazeera reported.
Aid workers are warning that the exodus from Libya has caused a crisis at the border with Tunisia. About 20,000 people were stranded at the Tunisian border and in need of food and shelter, reports the BBC. Tunisian authorities can no longer handle the influx of refugees, according to U.N. officials.
"They've been accommodating people in shelters, schools and places of their own. But we're now aware of the fact that they're very much stretched and they need the support of the international community," said Liz Eyster of UNHCR, the United Nations' refugee agency.
The U.N. estimates that about 100,000 people have fled the violence in the past week.