US President Barack Obama has said he does not rule out arming the rebels seeking to overthrow Libyan leader Colonel Muammar Gaddafi.
He said in an interview that Col Gaddafi had been greatly weakened and would ultimately step down.
Pro-Gaddafi forces have driven the rebels back tens of kilometres over ground they took in recent days after coalition air strikes.
The rebels have now retreated eastwards past the town of Ras Lanuf.
News of the rebel withdrawal came as an international conference on Libya in London agreed to set up a contact group involving Arab governments to co-ordinate help for a post-Gaddafi Libya.
At least several thousand people have been killed and thousands wounded since the uprising against Col Gaddafi's rule began more than six weeks ago, with the rebels now controlling much of the east and pro-Gaddafi forces holding the capital Tripoli and other western cities.
'All options' Asked by US media if he supported arming the rebels, President Obama said: "I'm not ruling it out but I'm also not ruling it in."
He said Libya presented a "unique circumstance" in which a coalition had come together under a UN mandate to "save a lot of lives", and he added that America's military was already overstretched.
French Foreign Minister Alain Juppe said at the London conference that France and its partners were prepared to discuss arming the rebels but not without the backing of a new UN Security Council resolution.
"I remind you that this is not what is envisaged by Resolution 1973... so for the moment France has agreed to the strict application of these resolutions," he said.
However, US Secretary of State Hillary Clinton told the conference that although UN sanctions prohibited the delivery of arms to Libya, the ban no longer applied.
"It is our interpretation that [UN Security Council resolution] 1973 amended or overrode the absolute prohibition on arms to anyone in Libya," she said.
UK Foreign Secretary William Hague told the BBC that Britain was not planning to give military assistance to rebels "in any form... at the moment".
"Our focus is on trying to protect those civilian areas with the measures that we've been carrying out the last ten days," he added.
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