Libyan rebels failed to secure control of the oil town of Brega from Moamer Kadhafi's forces, as the West shied away from supplying arms to their outgunned rag-tag army.
US Defense Secretary Robert Gates said the rebels needed training more than guns but suggested other nations do that job, while his French counterpart Gerard Longuet said providing weapons was not part of the UN mandate.
Gates said the military mission did not call for deposing Kadhafi and suggested ultimately it would be economic and political pressure and Libya's people -- not coalition air strikes -- that would topple him.
Grilled by US lawmakers, the Pentagon chief described the rebels as a "disparate," improvised force that had a supply of small arms seized at regime depots but sorely lacked military leadership.
"What they really need is training, command and control and some coherent organization," Gates told the House Armed Services Committee in Washington.
"The truth is, in terms of providing that training, in terms of providing that assistance to them, frankly, there are many countries that can do that. That's not a unique capability of the United States and as far I'm concerned someone else should do that."
The day after the regime was rocked by the defection of foreign minister Mussa Kussa, a report said British officials held confidential discussions in London with Mohammed Ismail, a top aide to Kadhafi's son Saif al-Islam.
Citing a British government source, the Guardian newspaper said the meeting, one of a number between the two nations in the last two weeks, is believed to have addressed an exit strategy for Kadhafi and his regime.
Britain's Foreign Office refused to comment on the report other than to say it would not provide a "running commentary" on contact between the two countries.
The defections were read in the west as a sign the Kadhafi regime was beginning to crumble under pressure. But militarily, Kadhafi's forces showed they can still deliver blows to the rebels.
The US military's top officer, Admiral Mike Mullen, said about 20 to 25 percent of Kadhafi's military had been knocked out by NATO-led bombing but "that does not mean he's about to break from a military standpoint."
"The biggest problem the last three or four days has been weather," Mullen told lawmakers, explaining that an inability to identify targets had reduced their effectiveness and allowed regime forces to make gains.
But experts say the opposition lacks anti-tank weapons, radios and other basics, and above all the disjointed, chaotic force needs rudimentary training.
AFP reporters said running battles raged on the edge of Brega, with regime forces shelling the insurgents who replied with Grad rockets and rocket-propelled grenades.
A day after Kadhafi's forces overran the key oil hub Ras Lanuf and neighboring villages, the frontline ebbed and flowed on the outskirts of Brega, about 800 kilometers (500 miles) from Tripoli.
Shells thumped across the desert north of the road, sending up black clouds of smoke as the rebels responded with a barrage of rockets that flared into the distance.
Clashes also ensued around an oil terminal, but it was unclear who was in control of the town, which the rebels had retaken at the weekend, only to lose it again on Wednesday.
There was house-to-house fighting in the bombed-out streets of central Misrata, Libya's third largest city, which has held out against a relentless siege by Kadhafi's forces.
"Kadhafi is killing us," shouted one opposition fighter in a ragged uniform and a blue beret, as artillery fire blasted nearby. Tank and rocket explosions echoed around the shuttered shops, the homes and mosques of the city center.
As the debate raged over whether Western powers should arm the insurgents, NATO chief Anders Fogh Rasmussen ruled out such a move.
"We are there to protect the Libyan people, not to arm people," Rasmussen told reporters.
US, British, French, Canadian, Danish and Belgian jets have attacked Kadhafi's ground forces since March 19 under UN Security Council resolution 1973, which authorised "all necessary measures" to protect civilians.
France, which had previously indicated it was ready to discuss sending arms to the insurgents, on Thursday appeared to rule it out.
"Such assistance is not on the agenda because it is not compatible with resolution 1973," Longuet told reporters.
On the humanitarian front, UN High Commissioner for Refugees Antonio Guterres said it was "absolutely essential that humanitarian access is given to all those in need of assistance wherever they might be in Libya."
French aid group Action Against Hunger (ACF) said a new wave of refugees fleeing the fighting in Libya was crossing into Tunisia and warned that even more might be on their way.
"A month after the start of the conflict, the number of displaced people fleeing the violence is again on the increase at the border between Libya and Tunisia," ACF said.
"Today 9,000 people are living in the camp at Choucha," compared with hardly 3,000 last week, the organization said.
Wednesday's defection of Kussa, the most senior figure to jump ship since the uprising against Kadhafi's iron-fisted 41-year rule erupted more than six weeks ago, was widely seen as a sign of a crumbling regime.
British Foreign Secretary William Hague insisted that Kussa, who has been linked to atrocities including the 1988 Lockerbie bombing over Scotland, had not been offered immunity from prosecution.
Scottish prosecutors said they had requested an interview with Kussa over the Lockerbie bombing, while Hague told reporters he was being interviewed "voluntarily" by British officials.
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