Muammar Gaddafi's troops unleashed a salvo of Grad rockets on towns in Libya's western mountains, and destroyed key fuel supplies in Missrata, aggravating a desperate humanitarian crisis in the besieged city.
The rebels, meanwhile, said Italy will supply them with weapons which Rome hastened to explain comprised "self-defence material", while 40 advisers from Britain, France and Italy were reportedly turning untrained insurgents into a fighting force in Benghazi.
At least nine rebels were killed and 50 wounded in fierce clashes in the northwestern town of Zintan Saturday as forces loyal to the Libyan strongman pressed the insurgents on several fronts.
The troops shelled fuel depots in Misrata, under siege from pro-Gaddafi forces for over two months, and dropped mines in its harbour using helicopters bearing the Red Cross and Red Crescent emblems, the rebels said.
The attacks could trigger fuel shortages that would hamper access to electricity and travel.
"It seems that the more desperate Gaddafi gets, the more he unleashes his firepower on the people," said Abdul Hafiz Ghoga, vice-chairman of the opposition National Transitional Council.
Intensified shelling struck the besieged port city of Misrata and western towns near the Tunisian border, according to Ghoga, while loyalist fighters attacked the southern oasis towns of Ojla and Jalo, which neighbour oil facilities.
In the western mountains towards the border with Tunisia, Gaddafi forces unleashed a salvo of Grad rockets on Zintan and Wazin, forcing an estimated 20,000 people to flee for shelter across the border, Ghoga said.
The towns were "heavily bombarded by Grad missiles," a rebel information officer told AFP adding that Gaddafi's troops were "firing randomly" and that overwhelmed rebels had pulled out of Wazin.
"The fighting was too heavy for them," he said.
Hundreds of regime troops backed by tanks had come to within 15 kilometres (nine miles) of Zintan's eastern edge Saturday morning before the insurgents drove them back twice as far to the Al-Aluwinia area.
It was there that the heaviest fighting took place throughout the day, as black smoke rose from the town virtually emptied of its population.
Gaddafi forces abandoned their vehicles as well as some prisoners.
But the toll was heavy for the insurgents.
Nine rebel bodies were seen by AFP in the Zintan hospital morgue, while a team of medics from Doctors Without Borders in the area reported that 50 were wounded, several of them in critical condition.
The mountainous area of Zintan, southwest of Tripoli, was one of the first to rise up against Gaddafi's regime in March. Rebels last month captured a border post there.
"Gaddafi's natural reaction is to wreak havoc on the population, on the civilians and the cities," Ghoga said, suggesting the Libyan strongman was under increased political and economic pressure after France, Britain, and Germany expelled Libyan diplomats and a trust fund was set up for rebels.
Representatives of the international community have promised $250 million (175 million euros) in humanitarian aid to the rebels and said the Gaddafi regime's frozen overseas assets, estimated at $60 billion, would be used later to assist the Libyan opposition.
Unlocking Gaddafi's funds abroad would, however, pose "many difficulties" as the international resolutions freezing them remained in force, said Giorgio Sacerdoti, international law professor at the University of Bocconi in Milan.
"The government in Tripoli has not disappeared and the resolutions of the UN and the European Union do not say that he (Gaddafi) is illegitimate," he added.
The economic situation in rebel held areas, including Benghazi, is steadily worsening, with costs of basic commodities skyrocketing and the rebel administration facing shortage of funds to replace receipts from oil exports which have come to a virtual halt.
"We are still discovering different segments that need to be paid, every single moment a new need arises," said Ali Torhuni, who manages the economic portfolio for the rebels.
Torhuni said the daily cost of administering the rebel-controlled east, including a partial payment of some salaries, adds up to $100 million.
By that estimate, the $250 millions in humanitarian aid the interim body secured in Rome on Thursday, would last less than three days.
The rebels said Italy has agreed to supply them with weapons "very soon" to fight Gaddafi's forces, although foreign ministry officials in Rome explained that this was "self-defence material."
And even as France, Britain and Italy send their warplanes to bomb Gaddafi's military in western Libya, they have also put a small number of "boots on the ground" in the rebel-held east.
About 20 British advisers and 10 each from France and Italy were reportedly holed up in the rebel bastion of Benghazi and working with senior rebel commanders to turn a ragtag, poorly armed and badly trained force into a fighting machine.
The group is keeping a low profile amid fears that the Libyan regime could use their presence as evidence the uprising was orchestrated by Western powers.