Libyan leader Muammar Gaddafi's son, Saif al-Islam, has warned that civil war could hit the country.
His comments came in a lengthy TV address as anti-government protests spread to the capital Tripoli, and were brutally countered by security forces.
Saif Gaddafi offered political reforms, and admitted that the police and army had made "mistakes", but said the death toll was lower than reported.
Human Rights Watch says at least 233 people have died since last Thursday.
It urged governments to tell Libya to stop the unlawful killing of protesters amid accounts of authorities using live ammunition against them.
On Monday, reports from Tripoli suggested the streets were mainly quiet, with government forces still patrolling Green Square after crushing protests in what witnesses called a "massacre".
A central government building, the People's Hall, was said to have been set ablaze and firefighters were trying to put out the flames.
'Shot in the head'
On Sunday evening, witnesses spoke of tear gas and live ammunition being used against protesters by the security forces.
A man who attended a rally in Tripoli's central Green Square said snipers on rooftops had fired indiscriminately into the crowd using what sounded like machine guns.
"People were shot in the head and in the back. I've now taken refuge in my home. I'm afraid to leave. There is a climate of fear," he told the BBC.
Other reports say gunmen in vehicles with photos of Col Gaddafi sped through the streets, opening fire and running people over.
In the hours before Saif Gaddafi's speech was broadcast, crowds in Tripoli could be heard chanting slogans calling for the toppling of the regime.
Earlier reports said Col Gaddafi had fled Libya, prompting crowds to come out on to the streets of Tripoli to celebrate, but his son told state TV viewers that his father remained in Libya "leading the battle".
Security forces fired tear gas and live ammunition in the Gourghi area of the city, according to witnesses, but there were no immediate reports of casualties.
Hundreds of Libyans, some armed with knives and guns, attacked a South Korean-run construction site west of Tripoli, an unnamed official at South Korea's foreign ministry told Reuters news agency.
It sparked a clash in which at least 15 Bangladeshi and three South Korean employees of the site were hurt - two of the Bangladeshis with serious stab wounds.
South Korean companies have worked on hundreds of construction projects in Libya in recent decades.
Benghazi, the country's second city, appears to be largely under the control of protesters after four days of unrest. Unconfirmed reports say an army general there has defected to the opposition.
Hospitals in the city are said to be struggling to cope with casualties, with one doctor saying he had received 50 bodies on Sunday afternoon alone.
Fresh demonstrations have been reported in cities including Tobruk, al-Bayda and Misrata.
In another blow to Col Gaddafi's rule, representatives of the Warfla tribe, Libya's biggest, have endorsed the protests.
The leader of the eastern al-Zuwayya tribe threatened to cut oil exports unless authorities halted what he called the "oppression of protesters", Reuters reported.
Libya's envoy to the Arab League, Abdel Moneim al-Honi, announced he was "joining the revolution" and its ambassador to India, Ali al-Essawi, told the BBC he was resigning in protest at his government's violent crackdown on demonstrators.
'Drunkards and thugs'
In his rambling TV address - the first comment on the unrest by a senior figure from the Libyan leadership - Saif Gaddafi poured scorn on protesters, talking of "drunkards and thugs" driving tanks about the streets of Benghazi.
"Libya is not Tunisia or Egypt," he declared.
In his speech, Saif Gaddafi criticised the foreign media for what he termed their exaggeration of the extent of the violence in Libya.
He said opposition groups and outsiders were trying to transform Libya into a group of small states. If they succeeded, he said, foreign investment would stop and living standards would drop drastically.
Troops had opened fire on protesters because they were not trained to handle civil unrest, he argued.
But he warned that if a civil war started, Libyans would be "mourning hundreds and thousands of casualties", and Libya would slide back to "colonial" rule.
On Sunday, the US issued its strongest condemnation yet of the use of force in Libya, calling on Tripoli to allow peaceful protests after "credible reports" of hundreds of casualties.
"We have raised to a number of Libyan officials, including Libyan Foreign Minister Musa Kusa, our strong objections to the use of lethal force against peaceful demonstrators," said state department spokesman Philip Crowley.
European Union foreign ministers were set to condemn the repression of protesters in Libya, according to the draft of a joint statement to be agreed at their meeting later on Monday.
Spanish Foreign Minister Trinidad Jimenez said the EU was considering pulling its citizens out of Libya - along with oil company BP, which reportedly said it was preparing plans to evacuate its own staff.
UK Foreign Secretary William Hague earlier told the Libyan leader's son in a phone call of London's "grave concern" at the escalation of violence.
Col Gaddafi is the Arab world's longest-serving leader, having ruled the oil-rich desert state since a coup in 1969.
The Middle East region is seeing a wave of pro-democracy protest, fuelled by the fall of Egypt's Hosni Mubarak on 11 February, and long-time Tunisian President Zine al-Abidine Ben Ali in January.