BENGHAZI, Libya (Reuters) - Libyans celebrated the liberation of the east of the country from the rule of Muammar Gaddafi, who has vowed to crush the revolt and on Wednesday was trying to assert his grip on the capital Tripoli, in the west.
Lying between Egypt and Tunisia, where a wave of Arab unrest has unseated two veteran presidents, the desert nation of six million which Gaddafi has ruled for 41 years seemed split in two, trapping thousands of foreign workers, jeopardizing oil exports and raising fears of tribal conflict and civil war.
The United States, which once branded Gaddafi a "mad dog" but had joined European powers' reconciliation to exploit Libya's oil wealth, said it might impose sanctions to help end violence which one European minister said may have cost 1,000 people.
President Barack Obama, who lacks the influence in Libya that U.S. aid gives him over some other Arab states, called for international unity to end the violence. He did not say Gaddafi should go, but said he would be held accountable for any abuses.
"It is imperative that the nations and peoples of the world speak with one voice," Obama told reporters at the White House in his first public comments on the revolt. "The suffering and bloodshed is outrageous."
Other foreign leaders, who also embraced Gaddafi, and his oil, after decades of isolating a leader who aided militants around the world, also voiced concern at the level of violence, which has included aerial bombing in parts of some cities.
Differences over how to proceed, some driven by concern not to jeopardize the safety of foreigners caught up in the trouble, appear to limit prospects for immediate, concerted international action, although some analysts have suggested that even military force might be applied to protect the rebel east from Gaddafi.
France called outright for sanctions. Obama said he would look at a "full range of options." U.S. officials said sanctions were among those being considered.
In the eastern city of Benghazi, cradle of the uprising and home to tribes long hostile to the 68-year-old leader, thousands filled the streets, lighting fireworks and waving the red, black and green flag of the king Colonel Gaddafi overthrew in 1969.
"We have been suffering for 41 years," said 45-year-old Hamida Muftah. "Gaddafi has killed people ... We are a very rich country, but most of the people are poorer than poor."
A medical official said about 320 had been killed in Benghazi since protests against oppression and poverty began last week.
Libya's Quryna newspaper quoted a military source as saying a bomber crew bailed out and left their aircraft to crash rather than bomb Benghazi. Earlier in the week, two pilots flew their planes to Malta to avoid, they said, attacking their own people.
In Tripoli, which remained largely closed to foreign media, local journalists said streets were calm after sporadic violence in recent days. Gaddafi's state television channel showed dozens of loyalists waving his portrait and chanting his praises.
"Lots of people are afraid to leave their homes in Tripoli and pro-Gaddafi gunmen are roaming around threatening any people who gather in groups," said Tunisian Marwan Mohammed, who was crossing the border home after leaving the Libyan capital.
Gaddafi's children spoke up in defense of the man who went on television on Tuesday to fulminate against "terrorists" and promise to "cleanse Libya house by house." They also sought to tell viewers foreign media were misreporting the week's events.
"Libyans are the victims of the biggest joke," his son Saif al-Islam, once seen as a reformer, told state television. "So wake up. Everything was lies. The truths start today. You will see it with your own eyes, tomorrow and after tomorrow."
Another son, former professional footballer Saadi, told the Financial Times that Saif al-Islam was drafting a constitution to "bring in new blood to govern our country," adding: "My father would stay as the big father who advises."
He acknowledged aircraft bombed areas around Benghazi but said they hit only bases to prevent Islamist radicals seizing arms. He said his father would regain control of the east: "When the people see the army, they will be afraid."
Gaddafi's daughter Aisha also appeared on state television, denying a report she tried to flee to Malta. "I am steadfastly here," she said. She added she was unaware of a report she had been dropped by the United Nations as a goodwill ambassador.
Others have deserted Gaddafi's side, however. Interior Minister Abdel Fattah Younes al Abidi and a senior aide to Saif al-Islam joined them: "I resigned from the Gaddafi Foundation on Sunday to express dismay against violence," Youssef Sawani, executive director of the foundation, told Reuters by SMS.
Gaddafi has deployed troops to the west of the capital to try to stop the revolt that started in the east from spreading. In the east, many soldiers have withdrawn from active service.
General Soliman Mahmoud al-Obeidy told Reuters in Tobruk in the east that the Libyan leader was no longer trustworthy. "I am sure he will fall in the coming days," he said.
Oil prices climbed above $111 a barrel at their highest since mid-2008 amid fears chaos could spread to other oil-producing countries and choke supplies, which could dash hopes of a quick global economic recovery.
Trade sources said at least three oil cargoes did make it out of Libyan ports over the 24 hours to mid-Wednesday, however.
Up to a quarter of Libya's oil production has been closed down, based on calculations from firms in the country, which stretches from the Mediterranean into the Sahara and supplies nearly 2 percent of world oil output.
Countries with strong business ties to Africa's third largest oil producer scrambled to evacuate thousands of citizens and a Turkish worker was shot dead at a building site near the capital, Turkish officials said.
A British oil worker said 300 people were stranded at a camp in the east of Libya, where he said local people had looted oil installations. "We are living every day in fear of our lives as the local people are armed," James Coyle told the BBC.
An estimated 1.5 million foreign nationals are working or traveling in Libya and a third of the population of 7 million are immigrants from sub-Saharan Africa.
Witnesses described scenes of chaos as people tried to leave.
"It's a biblical exodus," said Italian Foreign Minister Franco Frattini, predicting several hundred thousand would seek refuge in Italy.
The U.N. Security Council condemned the use of violence and called for those responsible for attacks on civilians to be held to account. British Prime Minister David Cameron called for a formal resolution.
"The Libyan regime is using appalling levels of force and violence against its own people including using airplanes that are shooting at people," he said.
But in the latest sign of international division over how to deal with Gaddafi, the prime minister of Qatar said he did not want to isolate Libya, where several senior officials have declared their backing for protests that began about a week ago.
Reporting by Tarek Amara, Christian Lowe, Marie-Louise Gumuchian, Souhail Karam, Firouz Sedarat, Tom Pfeiffer; Brian Love, Daren Butler; Dina Zayed, Sarah Mikhail and Tom Perry; Janet Lawrence and Philippa Fletcher; writing by Alastair Macdonald; editing by Andrew Dobbie