TOBRUK, Libya – Moamer Kadhafi's regime has lost vast swathes of Libya's east to an insurrection, it emerged Wednesday, as the West prepared for a mass exodus from a "bloodbath" in the north African country.

With condemnation of the brutal crackdown growing and foreigners fleeing the oil-rich country, Kadhafi was increasingly isolated on the international scene after reports hundreds of civilians were killed in the backlash by his forces.

Europe moved to isolate the Kadhafi regime, readying sanctions and warning it would hold to account those responsible for the bloody crackdown.

At London's Gatwick airport, foreigners who escaped said Tripoli had descended into war-like scenes. "Last night I've never been so scared in all my life," said Jane Macefield, an expatriate teacher.

Oil sold in New York, meanwhile, crossed the symbolic $100 a barrel level, hitting prices not seen since 2008, amid fears over supplies from Libya.

On the ground, Kadhafi opponents appeared firmly in control of Libya's coastal east, from the Egyptian border through to the cities of Tobruk and Benghazi, with government soldiers switching sides to join the uprising.

Tobruk is located about 100 kilometres (62 miles) from the border and Benghazi, the epicentre of protests, some 400 kilometres further west -- both in the Cyrenaica region.

Journalists in Cyrenaica saw regime opponents -- many of them armed -- all along the highway that hugs the Mediterranean coast.

Soldiers were declaring their support for the uprising, residents said, but the regime asserted it was still in control via a text message sent on the Libyan national mobile telephone network.

"God give victory to our leader and the people," the message said, promising a credit in cellphone time if it were forwarded to other mobile telephone users.

For his part, Deputy Foreign Minister Khaled Khaim said Al-Qaeda had set up an Islamic emirate in Derna, between Tobruk and Benghazi, headed by a former Guantanamo Bay inmate.

But residents in the city told reporters there was no substance to the reports, which they said the Libyan government was sowing to "scare Europe."

In the capital Tripoli, streets were mainly empty, barring a few dozen Kadhafi backers, despite his nationally televised call on Tuesday for a show of popular support.

Only Green Square -- a Kadhafi stronghold since the revolt against his four decades of iron-fisted rule broke out on February 15 -- pulsed with activity as pro-regime supporters staged a demonstration.

Libyan authorities said food supplies were available as "normal" in the shops and urged schools and public services to restore regular services, although economic activity and banks have been paralysed since Tuesday.

Kadhafi, 68, made his call for support in an angry rambling speech on television, declaring he would die a martyr in Libya, and threatening to purge opponents "house by house" and "inch by inch."

Proclaiming the support of the people, Kadhafi ordered the army and police to crush the revolt against his rule.

On Tuesday, Libya's regime said 300 people had been killed in the protests, but the International Federation for Human Rights (IFHR) said on Wednesday that at least 640 had died.

The figure includes 275 dead in Tripoli and 230 in Benghazi.

The Red Cross said on Wednesday it was trying to send medical teams to help treat the injured in Libyan cities.

Libya's bar to the entry of foreign news media has complicated the chronicling of events there, but several correspondents entered the east of the country on Wednesday from Egypt.

Kaim declared that they were "outlaws" and said they would be arrested if they did not turn themselves in.

Prime Minister Silvio Berlusconi of Italy, the north African nation's top trading partner, urged the world to oppose "unjustified violence and drifts towards Islamic extremism" in Libya, a day after phoning Kadhafi.

China, the European Union, France, India, South Korea and the United States, among others, scrambled to evacuate people from the turbulent nation, as the international community expressed outrage at the crackdown.

The UN Security Council "condemned the violence and use of force against civilians, deplored the repression against peaceful demonstrators and expressed deep regret at the deaths of hundreds of civilians."

UN chief Ban Ki-moon called for international efforts to ensure a "prompt and peaceful transition" and the UN Human Rights Council said it would hold a special session on Friday to discuss the crisis.

The announcement came a day after Navi Pillay, the UN High Commissioner for Human Rights, said, "widespread and systematic attacks against the civilian population may amount to crimes against humanity."

Britain's The Financial Times reported that the strongman's family was feuding over the vast business empire the Kadhafi regime has built up since coming to power in 1969.

Another British daily, The Times, said it had footage of severely wounded and dead protesters in a hospital in Benghazi proving heavy weapons were being used to crush the revolt.

Army, police and militias have killed unarmed demonstrators indiscriminately, even to the point where air force planes strafed civilians, according to widespread reports.

In response, Peru suspended diplomatic ties with Libya, the first nation to do so.

Spain said Kadhafi had "lost all legitimacy to continue to lead his country," as EU President Herman Van Rompuy insisted the crimes could "not to remain without consequences."

Kadhafi, a former army colonel, is yet to show any signs of relenting despite numerous high-level defections by ministers, diplomats and military officers, who have announced their support for the rebellion.

The turmoil in Libya, which has Africa's largest oil reserves, is the continent's fourth-largest producer and where many Western oil companies have suspended operations, has sent crude prices soaring.

Many Western oil companies have suspended operations, and in the wider Middle East where many countries face protests for change.