The 15-nation council -- the Western powers along with China, India and Russia -- made a pointed call for action against those responsible for the attacks.
The council "condemned the violence and use of force against civilians, deplored the repression against peaceful demonstrators and expressed deep regret at the deaths of hundreds of civilians."
Libyan authorities have acknowledged at least 300 dead in the past week, but rights groups say the toll could be as high as 400.
Council members "underscored the need to hold to account those responsible for attacks, including by forces under their control, on civilians," said a statement released after protracted negotiations.
"They called for an immediate end to the violence and for steps to address the legitimate concerns of the population."
Gaddafi was not named in the statement, but it made clear that the strongman who has ruled the North African nation for more than four decades was the target.
The council said the Libyan government must "protect its population," allow access to international human rights monitors and humanitarian agencies, as well as ensure the safety of foreigners and help those who want to leave.
Libyan diplomats who have broken with Gaddafi called on the Security Council to hold the meeting and requested a UN no-fly zone over the country as well as humanitarian action. But diplomats said these plans were not discussed.
B. Lynne Pascoe, the UN under-secretary-general for political affairs, told reporters after the meeting that UN staff and other witnesses in Libya had seen military activity.
"People have seen many planes overhead, they have seen helicopters overhead, they have seen tanks, they have seen some firing going on on the ground, they have seen some snipers," Pascoe said.
Ibrahim Dabbashi, the Libyan deputy ambassador, told reporters the council statement "was not strong enough" and that since Gaddafi made an angry and defiant television speech earlier, army units loyal to the strongman had launched attacks against civilians.
He named Gharyan, Zuwarah and other cities as the scenes of the fresh violence. Dabbashi did not give the source of his information or say what kind of attacks were being staged. "Certainly the people have no arms. I think genocide started now in Libya," he added.
UN special advisers on the prevention of genocide and protecting civilians, Francis Deng and Edward Luck, said in a statement that reports of "mass violence" coming out of Libya "may well constitute crimes against humanity, for which national authorities should be held accountable."
Gaddafi ordered his forces to crush the uprising against his rule, warning armed protesters they will be executed and vowing to fight to the end.
The Arab world's longest-serving ruler said he would die as a martyr rather than give up power.
Western nations welcomed the Security Council statement as a strong first step against the Gaddafi crackdown.
Britain's UN Ambassador Mark Lyall Grant praised the "strong united message" and said the council could hold a new meeting on the crisis.
"The international community has said in one clear and unified voice that it condemns the violence against civilians in Libya, that the violence must cease immediately," added deputy US ambassador Rosemary DiCarlo.
Human Rights Watch, however, urged stronger action.
"At minimum, the Security Council should act now to impose a travel ban and an asset freeze on senior Libyan officials and military commanders found to be responsible for grave human rights violations," said HRW's UN specialist Philippe Bolopion.