Battle lines in Libya harden

With residents shouting “Free, free Libya,” anti-government rebels who control the battle-scarred city of Benghazi, an opposition stronghold, deployed tanks and anti-aircraft weapons Sunday, bracing for an attack by troops loyal to Moammar Gaddafi. Politicians in Benghazi, meanwhile, set up their first leadership council in a step that could lead to an alternative to the regime.

In the capital of Tripoli, where Gaddafi is still firmly in control, state banks began handing out the equivalent of $400 per family in a bid to win back loyalty. “The Libyan people are fully behind me,” Gaddafi defiantly told Serbian TV, even as about half of the country was turning against him and world leaders moved to isolate him. “A small group (of rebels) is surrounded … and it will be dealt with.”

Gaddafi has launched by far the bloodiest crackdown in a wave of anti-government uprisings sweeping the Arab world, the most serious challenge to his four decades in power. The United States, Britain, and the UN Security Council all slapped sanctions on Libya this weekend, and President Barack Obama said it is time for Gaddafi to go.

Gaddafi’s son, Seif al-Islam, in an interview with U.S. television, insisted that his father will not relinquish power and that Libya had not used force or airstrikes against its own people.

Fox News reports that there was no major violence or clashes on Sunday, although gunfire was heard after nightfall in Tripoli.

Secretary of State Hillary Rodham Clinton said the United States was “reaching out to many different Libyans who are attempting to organize in the east and as the revolution moves westward there as well.” Two U.S. senators said Washington should recognize and arm a provisional government in rebel-held areas of eastern Libya and impose a no-fly zone over the area — enforced by U.S. warplanes — to stop attacks by the regime.

The regime, eager to reinforce its view that Libya is calm and under its control, took visiting journalists to Zawiya, thirty miles west of the capital of Tripoli on Sunday. The tour, however, confirmed that anti-government rebels control the center of the city of 200,000 people, with army tanks and anti-aircraft guns mounted on pickup trucks at the ready.

Hundreds of people chanted “Gaddafi out!” in central Zawiya, a key city close to an oil port and refineries. It also is the nearest population center to Tripoli to fall into rebel hands.

The charred hulks of cars littered