Rebels fled under heavy tank and artillery fire from Ras Lanuf in eastern Libya on Wednesday after Moamer Kadhafi's troops overran the strategic oil refinery town, AFP reporters said.
Rebel fighters retreating in their hundreds from the front lines through Uqayla, about 20 kilometres (12 miles) east of Ras Lanuf, called for coalition air strikes on Kadhafi's forces, which they said had failed to come in the night.
"We are facing a big problem. We are pulling back," said one fighter, Salama Dadida, as hundreds of cars and pickup trucks sped from Uqayla towards Brega, 240 kilometres (150 miles) south of the rebel stronghold Benghazi.
"Kadhafi's troops are firing rockets and tank shells," he said.
"We want the French to bomb the (Kadhafi) soldiers," said another fighter, Ali Atia al-Faturi, as the sound of shelling and gunfire grew louder.
On Tuesday the rebels seeking to topple Kadhafi came within 100 km of Sirte, the strongman's hometown, before encountering fierce resistance from loyalist troops.
Under barrages of artillery fire, rebel fighters stampeded from the scene, many fleeing aboard pickup trucks, reversing an advance launched when Britain, France and the United States started UN-mandated air strikes on March 19.
They huddled down in Ras Lanuf overnight but soon after dawn Kadhafi's forces pressed east and began shelling the small town, a strategic location due to its oil refinery.
Paris has not ruled out arming the rebels and Foreign Minister Alain Juppe said at a London conference on Tuesday that France is prepared to hold discussions on the issue.
US President Barack Obama, who has laid out a moral imperative for protecting Libyan civilians caught in the battle, also said he did not rule out arming the rebels as they seek to make territorial gains.
"I'm not ruling it out. But I'm also not ruling it in. We're still making an assessment partly about what Kadhafi's forces are going to be doing," Obama said.