Libyan rebels are fleeing the oil port of Ras Lanuf after sustained attacks by forces loyal to Col Muammar Gaddafi.
There were reports of severe civilian casualties after rebel positions and residential areas came under fire from rockets and shells.
Libyan state TV said pro-Gaddafi troops had also cleared rebels from the oil port of Sidra, west of Ras Lanuf.
One of Col Gaddafi's sons, Saif al-Islam, said it was time for "liberation" and "action".
In other developments:
- Gulf Arab states said Col Gaddafi's regime was illegitimate and contacts should be made with the rebels
- US President Barack Obama's top intelligence adviser, James Clapper, predicted Col Gaddafi would defeat the rebels
- The Brazilian daily Estado said one of its journalists, Andrei Netto, had been safely released after going missing days ago in Zawiya; citing Libyan officials, the UK Guardian said its correspondent, Ghaith Abdul-Ahad - who had been with Netto - remained in custody
- Three Dutch soldiers taken captive in late February as they tried to evacuate civilians from Sirte are being freed
In recent days, Col Gaddafi's forces have been trying to regain ground in the rebel-held east, as well as the town of Zawiya, west of Tripoli.
One report on Thursday said that pro-Gaddafi tanks advancing on Ras Lanuf had reached their easternmost position since the conflict began.
A witness in the oil port said he had seen dozens of dead bodies in the residential part of the town.
A BBC reporter said the Ras Lanuf hospital had been evacuated due to the bombardment, and a mosque had been hit in an oil workers' residential area.
"We've been defeated," a rebel fighter told AFP news agency. "They are shelling and we are running away."
But Reuters quoted rebels as denying Ras Lanuf had fallen.
Government planes also targeted Brega, another oil port further east.
Zawiya, 50km (30 miles) west of Tripoli, is now reported to be either largely or wholly under the control of government forces, after being bombarded for days with tanks and artillery.
Residents of the city have said women and children are among the dead.
Western journalists in Tripoli were taken late on Wednesday to a stadium on the outskirts of Zawiya that was filled with Gaddafi loyalists waving green flags.
BBC diplomatic correspondent Jonathan Marcus says fears the military balance may be shifting in Col Gaddafi's favour have prompted calls for urgent international action.
However, the African Union said on Thursday evening from the Ethiopian capital Addis Ababa that it rejected any idea of foreign military intervention in Libya.
Ramtane Lamamra, commissioner of the AU's Peace and Security Council, said that body would appoint five heads of state to travel to Libya shortly in an effort to end the conflict.
France earlier became the first country to recognise the Libyan rebel leadership, the National Transitional Council (NTC), as the country's legitimate government.
Britain later followed suit, with its Prime Minister David Cameron and French President Nicolas Sarkozy jointly urging other EU countries to do likewise.
In a letter to European Council President Herman Van Rompuy, Mr Cameron and Mr Sarkozy also backed plans for the possible imposition of a no-fly zone over Libya "or other options against air attacks".
Nato defence ministers discussed a no-fly zone during talks on the Libyan crisis in Brussels, but they decided more planning was needed.
Mustafa Abdul Jalil, head of the rebel council, urged other countries to recognise them as Libya's leaders.
The revolt began in mid-February when opponents to Col Gaddafi's 41-year rule seized towns and cities in the east, after successful popular uprisings in neighbouring Tunisia and Egypt.