BENGHAZI, Libya – Libyan rebels hit out at the NATO-led air mission on Tuesday saying that it was failing in its UN mandate to protect civilians in the besieged third city of Misrata.

The accusation came as the rebels sustained their first significant loss of territory to Moamer Kadhafi's forces in almost a week after they were sent fleeing from the edge of the oil refinery town of Brega in a major assault.

One boost was the docking in the port of Tobruk of a one-million-barrel supertanker in readiness to load the rebels' first oil export shipment, potentially worth more than 100 million dollars (70.5 million euros).

The Libyan government meanwhile named a replacement for its former foreign minister Mussa Kussa who defected to the West last week.

The top commander of rebel forces, Abdelfatah Yunis, accused NATO-led aircraft of standing idly by while loyalist troops kept up the artillery bombardment of civilians in Misrata that they have maintained for more than 40 days.

NATO "is letting the people of Misrata die every day," Yunis told a news conference in the rebel stronghold of Benghazi.

"If NATO waits one more week, there will be nothing left in Misrata," he added.

"If NATO wanted to break the blockade of the city, they would have done it several days ago... Every day, civilians -- elderly people and children -- are dying in Misrata. NATO has done nothing, they have just bombed here and there."

Doctors said last week that 200 people had been killed in Misrata since the uprising began on February 17, a figure that is likely to have risen in recent days.

A Turkish aid ship brought out scores of wounded of the city at the weekend who told harrowing tales of the bombardment of residential areas by loyalist artillery.

But NATO's chief of allied operations, Brigadier General Mark van Uhm, said earlier Tuesday that the alliance was doing all it could to protect civilians in the city.

"Misrata is a number one priority because of the situation on the ground over there," the NATO chief of allied operations said.

"We have confirmation that in Misrata tanks are being dispersed, being hidden, (and) humans being used as shields in order to prevent NATO sorties to identify targets," he said.

Van Uhm said that the international air operation, under NATO command since late last week, had had a major impact.

"We have taken out 30 percent of military capacity of pro-Kadhafi forces," said Brigadier General Mark van Uhm, citing an assessment by the Libya operation's commander, Lieutenant General Charles Bouchard.

Kadhafi's forces pushed back rebels from the oil refinery town of Brega on the central Mediterranean coast despite a NATO air strike on loyalists who launched an intensive artillery barrage at their fleeing foes.

Heavy fighting erupted in the morning around Brega, with rebels using rocket launchers to counter the incoming artillery barrage of loyalists.

But by afternoon, the rebels were seen pulling back in hundreds of vehicles in the direction of Ajdabiya, a transport hub about 80 kilometres (50 miles) back towards their stronghold of Benghazi.

The rebels played down the loss of territory, saying it was unlikely to be the last reverse they suffered before Kadhafi's regime was overthrown.

"There is no revolution without setbacks," Mustafa Gheriani, a spokesman for the rebels' Transitional National Council told AFP.

"But the people will win. Kadhafi cannot rule Libya with his machine -- his militias and his mercenaries... We are committed to fighting this tyrant, and either we will drive him out or he will rule a country with no people in it."

Earlier the Libyan government said it was ready to negotiate reforms but only provided Moamer Kadhafi was not forced out.

Government spokesman Mussa Ibrahim told journalists in Tripoli that everything except the departure of Kadhafi was negotiable, saying he was a unifying figure after ruling the nation for four decades.

"What kind of political system is implemented in the country? This is negotiable, we can talk about it," Ibrahim said. "We can have anything, elections, referendums."

But Kadhafi's future was sacrosanct, he stressed, only hours after the rebels flatly rejected a reported peace deal that could see the embattled leader's son take charge of the North African nation.

The "guide of the revolution", who has always rejected the title of head of state, was "the safety valve" for the unity of the country's tribes and people, Ibrahim said. "We think he is very important to lead any transition to a democratic and transparent model."

The government named deputy minister for European affairs Abdelati Obeidi as its new top diplomat to replace Kussa, the longtime head of Libyan intelligence who was regarded as a key confidant of Moamer Kadhafi before he took refuge in Britain last week, a senior foreign ministry official told AFP.

A former prime minister, Obeidi, has also served as foreign minister before.

Kadhafi's son Seif al-Islam dismissed Kussa as just a "sick and old" man who had succumbed to the psychological pressures of war.

The son, who had not been seen in public since coalition air strikes began on March 19, said Kussa had been allowed to go abroad for medical treatment.

Asked in a BBC interview what information Kussa might provide the West, Seif al-Islam said: "He's sick, he's sick and old, of course, he would come out with funny stories."

But he dismissed the idea Kussa might have secrets to share, for instance on the extent of the involvement of the Libyan intelligence services, in which he was long a senior figure, in the December 1988 bombing of a US airliner over Lockerbie, Scotland, which killed 270 people.

"Like what? The British and Americans know about Lockerbie, there's no secrets any more," the son said.

A tanker meanwhile docked in the rebel-port of Tobruk ready to load crude as the opposition seeks to take advantage of a pledge to market its oil exports by Gulf state Qatar, one of just three countries with France and Italy, to recognise its rival administration.

A senior US diplomat arrived in Benghazi on Tuesday for talks with the rebels but the State Department said the move did not imply any recognition of their administration.