At the end of a conference on Libya in London, Hillary Clinton, the US secretary of state, said for the first time that she believed arming rebel groups was legal under UN security council resolution 1973, passed two weeks ago, which also provided the legal justification for air strikes.
The British foreign secretary, William Hague, agreed that the resolution made it legal "to give people aid in order to defend themselves in particular circumstances".
But Clinton admitted the Americans "do not know as much as we would like to" about the interim national council (INC). In Washington, Admiral James Stavridis, Nato's supreme allied commander in Europe, told the Senate that intelligence analysis had revealed "flickers" of al-Qaida or Hezbollah presence inside the movement, and argued it required further study.
America's envoy to the UN, Susan Rice, told Fox News she was "reading much the same stuff" and distanced herself from Stavridis's comments. "I think we can't rule out the possibility that extremist elements could filter into any segment of Libyan society and it's something clearly we will watch carefully for," she said.
The west's main Arab ally, Qatar, also said providing weapons to Gaddafi's opponents should be considered if air strikes failed to dislodge him. The Gulf state's prime minister, Sheikh Hamad bin Jaber al-Thani, said the effect of air strikes would have to be evaluated in a few days, but added: "We cannot let the people suffer for too long."
A prolonged conflict appeared more likely after pro-Gaddafi forces launched a powerful counterattack against Libyan rebelstoday, sending the revolutionaries fleeing from towns they had taken only two days earlier.
Mahmoud Shammam, a spokesman for the INC said the opposition lacked weapons. "We don't have arms at all, otherwise we would finish Gaddafi in a few days. We ask for the political support more than we are asking for the arms. But if we get both that would be great."
However, international law experts have warned that the US is likely to be in breach of the UN security council's arms embargo on Libya if it sends weapons to the rebels. Lawyers analysing the UN's 26 February arms embargo said it would require a change in the terms for such a move not to breach international law.
"The embargo appears to cover everybody in the conflict, which means you can't supply arms to rebels," said Philippe Sands QC, professor of international law at University College London.
The French and Italians have also disagreed with Washington and London's interpretation of the UN resolution.
Asked about the possibility of arming the rebels, the French foreign minister, Alain Juppé, said: "I remind you it is not part of the UN resolution – which France sticks to – but we are ready to discuss it with our partners."
French and Italian officials said the issue had been discussed at the conference in London, contradicting US and British assurances to the contrary.
There appeared to be greater consensus on offering Gaddafi a way out of the conflict through exile, with Italy leading the way in seeking a haven prepared to accept the Libyan leader. The UK was not looking for somewhere for him to go, said Hague. "That doesn't exclude other countries from doing so."
Barack Obama said in television interviews on Tuesday he thought it was too early to negotiate an exit for Gaddafi. He told CBS News Gaddafi's inner circle was beginning to recognise that "their days are numbered". He said some may be negotiating to leave the regime. "But that information may not have filtered to Gaddafi yet."
Clinton said the UN's special envoy to Libya, Abdul Ilah Khatib, was due in Tripoli soon to explore "a political solution that could involve [Gaddafi] leaving the country".
The INC was not formally invited to the London conference, and has only been recognised so far by France and Qatar. However, it emerged from the conference with its status enhanced.
The group launched its political manifesto, A Vision of a Democratic Libya, from the Foreign Office's official briefing room. Shammam said Clinton herself had "just stopped short of recognition", but she had dispatched a senior US diplomat, Chris Stevens, to Benghazi to strengthen ties.
"We have been told here that a lot more delegates will be coming to Benghazi soon," said the INC spokesman.
The conference agreed to study a Qatari proposal to sell oil from opposition-held areas of Libya, to provide revenue for the insurgents.
Pro-Gaddafi forces bolstered by recent reinforcements bombarded rebel positions in Bin Jawad, 45 miles from the politically and strategically significant town of Sirte on the Libyan coast.
Revolutionaries around Bin Jawad eventually fled under the intense assault.
The government army moved into the town and then pressed east for 20 miles to within striking distance of Ras Lanuf, which was left dangerously vulnerable. Towns on the road to Benghazi have changed hands several times since the beginning of the uprising two months ago.
The rebels' see-sawing military fortunes, which saw them charge down the road to Bin Jawad on Sunday after western air strikes sent Gaddafi's forces fleeing only to charge back up again yesterday, is further confirmation that they are unlikely to be able to defeat the regime without foreign air forces continuing to destroy government tanks and artillery.
It was not immediately clear if there had been any air strikes near Sirte or Bin Jawad on Monday, but the advance of the regime's forces did not appear to have been slowed.
Rebel fighters demanded to know if Nicolas Sarkozy, the French president, who is a favourite of the revolutionaries after his government recognised them, was sleeping.
When killings are being justified at behest of the super powers who is to be held accountable is it we or them?