The Opposition to Libyan leader Muammar Gaddafi is vowing to liberate Tripoli as more army units switch sides and more towns and cities break away from his grip of 42 years.

The Libyan leader is holed up with a force of militiamen roaming the streets and tanks guarding the outskirts of the capital.

International momentum is building for action to punish Gaddafi's regime for the bloody crackdown it has unleashed against the uprising that began February 15.

President Barack Obama said the suffering and bloodshed in Libya "is outrageous and it is unacceptable," and he directed his administration to prepare a full range of options, including possible sanctions that could freeze the assets and ban travel to the US by Libyan officials.

French President Nicolas Sarkozy raised the possibility of the European Union cutting off economic ties.

Another proposal gaining some traction is for the United Nations to declare a no-fly zone over Libya to prevent it using warplanes to hit protesters.

UN High Commissioner for Human Rights Navi Pillay said that if reports of such strikes are confirmed, "there's an immediate need for that level of protection".

In Tripoli, protest organisers called for new rallies today and tomorrow, raising the potential for a more bloody confrontation.

Militiamen and Gaddafi supporters - a mix of Libyans and foreign African fighters bused in - roamed the capital's main streets, called up on Tuesday night by the Libyan leader in a fist-pounding speech in which he vowed to fight to the death.

The gunmen fired weapons in the air, chanting Long live Gaddafi, and waved green flags. With a steady rain, streets were largely empty, residents said.

In many neighbourhoods, residents set up watch groups to keep militiamen out, barricading streets with concrete blocks, metal and rocks, and searching those trying to enter, a Tripoli activist said.

Col Gaddafi's residence at Tripoli's Aziziya Gates was guarded by loyalists along with a line of armed militiamen in vehicles, some masked, he said.

The radio station building was also heavily fortified. In one western neighbourhood, security forces stormed several homes and arrested three or four people, a witness said, while tanks were deployed on the eastern outskirts, witnesses in at least one neighbourhood said.

"Mercenaries are everywhere with weapons. You can't open a window or door. Snipers hunt people," said another resident, who said she had spent the night in her home awake hearing gunfire outside.

Youtube footage shows a Gaddafi poster attacked in Tripoli.

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