TRIPOLI (Reuters) - Muammar Gaddafi's better armed and organized troops reversed the westward charge of Libyan rebels as world powers gathered in London on Tuesday to plot the country's future without the "brother leader."

Ahead of the conference,President Barack Obama told Americans in a televised address that U.S. forces would not get bogged down trying to topple Gaddafi, but he stopped short of spelling out how the military campaign in Libya would end.

The United States is scaling back to a "supporting role" to letNATO take full command from U.S. forces on Wednesday, but air strikes by U.S., French and British planes remain key to smashing Gaddafi's armor and facilitating rebel advances.

It took five days of allied air strikes to pulverize Libyan government tanks around the town of Ajdabiyah before Gaddafi's troops fled and the rebels rushed in and began their 300-km (200-mile), two-day dash across the desert to within 80 km (50 miles) of the Gaddafi loyalist stronghold of Sirte.

But the rebel pick-up truck cavalcade was first ambushed, then outflanked by Gaddafi's troops. The advance stopped and government forces retook the small town of Nawfaliyah, 120 km (75 miles) east of Sirte.

"The Gaddafi guys hit us with Grads (rockets) and they came round our flanks," Ashraf Mohammed, a 28-year-old rebel wearing a bandolier of bullets, told a Reuters reporter at the front.


The sporadic thud of heavy weapons could be heard as dozens of civilian cars sped eastwards away from the fight.

One man stopped his car to berate the rebels.

"Get yourselves up there and stop posing for pictures," he shouted, but met little response.

Later, a hail of machinegun and rocket fire hit rebel positions. As the onslaught began, rebels took cover behind sand dunes to fire back but gave up after a few minutes, jumped into their pick-up trucks and sped off back down the road to the town of Bin Jawad. Shells landed near the road as they retreated.

Without air strikes it appears the rebels are not able to hold ground or make advances. The battle around Sirte, Gaddafi's birthplace, will show if the rebels have reached their limit.

Reports from retreating rebels that some residents outside Sirte fought alongside government troops are an ominous sign for world powers hoping for a swift end to Gaddafi's 41-year rule.

Obama said he had no choice but to act to avoid "violence on a horrific scale" against the Libyan people.

Gaddafi accused Western powers of massacres of Libyan civilians in alliance with rebels he said were al Qaeda members.

"Stop your brutal and unjust attack on our country ... Hundreds of Libyans are being killed because of this bombardment. Massacres are being mercilessly committed against the Libyan people," he said in a letter to world leaders carried by Libya's official news agency.

"We are a people united behind the leadership of the revolution, facing the terrorism of al Qaeda on the one hand and on the other hand terrorism by NATO, which now directly supports al Qaeda," he said.

More than 40 governments and international organizations were meeting in London on Tuesday to set up a steering group, including Arab states, to provide political guidance for the response to the war and coordinate long-term support to Libya.

Both Britain and Italy suggested Gaddafi might be allowed to go into exile to bring a quick end to the six-week civil war, but the U.S. ambassador to the United NationsSusan Rice said there was no evidence the Libyan leader was prepared to leave.


U.S. Secretary of State Hillary Clinton met Libyan National Council envoy Mahmoud Jebril before the London meeting. A senior U.S. official said the two could discuss releasing $33 billion in frozen Libyan assets to the opposition.

"They are assets that belong to the Libyan people," the official said, but gave no further details.

Such meetings also help Washington better understand the rebel leadership, its military forces and the problems they face, the official said, though Obama pledged once again that U.S. ground forces would not be deployed to help them out.

"We will deny the regime arms, cut off its supply of cash, assist the opposition and work with other nations to hasten the day when Gaddafi leaves power," Obama said, but the United States would not use force to topple him -- as his predecessorPresident George W. Bush did in ousting Saddam Hussein in the 2003 U.S.-led invasion of Iraq.

"To be blunt, we went down that road in Iraq," Obama told an audience of military officers in Washington. "But regime change there took eight years, thousands of American and Iraqi lives, and nearly a trillion dollars. That is not something we can afford to repeat in Libya."

In western Libya, rebels and forces loyal to Gaddafi both claimed control over parts of Misrata and fighting appeared to persist in the fiercely contested city, Libya's third largest.

U.S. forces attacked three Libyan ships, including a coast guard vessel, to stop them firing indiscriminately at merchant ships in the port of Misrata, 200 km (120 miles) east of Tripoli, military officials said on Tuesday.

The action on Monday night was against the Libyan coast guard vessel Vittoria and two smaller craft. The Vittoria was beached, one of the smaller craft was destroyed and the other abandoned, the U.S. Sixth Fleet said in a statement.

(Additional reporting by Angus MacSwan, Alexander Dziadosz, Edmund Blair, Maria Golovnina, Michael Georgy, Ibon Villelabeitia, Lamine Chikhi, Hamid Ould Ahmed,Mariam Karouny, Joseph Nasr, Marie-Louise Gumuchian, Steve Gutterman, Matt Spetalnick and Alister Bull; Writing by Jon Hemming; Editing by Giles Elgood)

Source: Reuters US Online Report World News