France is pushing to "speed up" multilateral efforts for a no-fly zone over Libya to curb the civil conflict there, French Foreign Minister Alain Juppe said in a statement today.

His statement came as the Libyan rebels were continuing to retreat, losing the town of Brega.

Juppe hailed the Arab League, the 22-country bloc whose support is judged crucial for tackling the region, for supporting proposals led by France and Britain for a UN Security Council resolution to impose a no-fly zone.

"France hails in particular the Arab League's call to the Security Council to immediately impose a no-fly zone against Libyan military aircraft and establish a safety zone in the areas exposed to bombardment," he said.

"France is going to speed up its efforts in the coming hours, together with the EU, Arab League, UN Security Council and the Libyan National Transition Council," he added, referring lastly to the Libyan opposition.

France has formally recognised the council as Libya's legitimate representatives. The European Union as a whole has not gone that far but has agreed to meet them to discuss the crisis.

Russia and China have appeared reluctant to back the no-fly zone while the United States, Germany and Italy have taken a cautious line on intervention, which Washington and the European Union say can only happen with a UN mandate.

REBELS LOSING GROUND AND MORALE

Following an internal uprising against Libyan ruler Muammar Gaddafi last month, forces loyal to him have launched a fierce bombardment of the rebels, driving them out of several towns.

Fear is gripping Benghazi, the stronghold of the rebellion against the regime and morale is sinking fast as residents brace for possible attacks by loyalists.

"The euphoria is gone," said grim-faced Mohammed Gepsi, a former civil servant, standing outside the headquarters of the anti-Gaddafi uprising in the eastern Mediterranean city.

"We are afraid of what will happen next, afraid of bombardments," he said.

Gaddafi loyalists, using air strikes and heavy artillery, are pushing a fierce offensive against the rebels and have driven them out of several cities and towns along the coast to the west.

Today fighters, most of them young, were seen retreating from the eastern town of Brega towards Ajdabiya, 80 kilometres away, the gateway to Benghazi and the rebel-held border city of Tobruk.

Gaddafi forces may still be 250 kilometres (155 miles) away from Benghazi, but in the city the mood is sombre and morale slipping away like quicksand.

"The mood has changed" after the fall of Brega and the key oil city of Ras Lanuf this week, said Gepsi.

"The young are still determined to fight but older people, mothers and fathers, are afraid for their children," he said.

Fatma Mufta agrees. "We are afraid of the bombardments. We are afraid of Gaddafi's forces," she said, as she shopped for food in a supermarket with her husband and her daughter.

"We live near the airport and Gaddafi can hit it," she said.

She is not afraid of running out of food or water, even if many shops in Benghazi are shuttered, Mufta added.

"We can get help in the mosques. They give milk free of charge as well as nappies for babies."

Mufta's 17-year-old daughter has been stuck at home since the uprising started a month ago and is bored, so she spends her time watching the news on Arab satellite channels and hoping her university will reopen soon.

On the seafront, near the offices of the rebel-proclaimed transitional national council, some insist that the outgunned insurgents have not been crushed.

"Western nations will help us," said Abdul Salam el-Amari.

"With the help of God, and the imposition of a no-fly zone, we will be back on top of things," he said, his 10-year-old daughter next to him with the pre-Gaddafi Libyan flag painted on her face.

The Arab League yesterday urged the United Nations Security Council to take steps to impose a no-fly zone over Libya to ground Gaddafi's warplanes -- a move which has divided the international community.

Ahmed, an oil executive, is in denial, like many Libyans who refuse to accept the gains made this past week by Gaddafi's forces.

"Our forces are pulling out of Brega for tactical reasons. We have not been defeated," he said.

Imam Bughaidis, an opposition activist, went further, saying the rebels have put in place a "military defence" for Benghazi.

"Many rebels are staying in Benghazi," she said, adding that "weapons" are flowing into the city.

""We know that Gaddafi has sleeper cells in Benghazi. We know where they are and they are constantly under surveillance," she added.

Nearby a crowd had formed around a man trying to fire up morale.

"We must kill all the assassins. We must kill all the Gaddafi loyalists in the city," he shouted.

A man in the crowd rebuked him: "We are not like Gaddafi. We don't kill people. We put them in jail."

On the coastal road to Ajdabiya, pick-up trucks crammed with fighters disappeared into the distance.

"We are all martyrs ready to die for our country," a fearless 18-year-old said before joining a dozen men heading for the battlefront.

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