Libyan leader Muammar Gadhafi's forces attacked early on Saturday the eastern city of Benghazi, defying world demands for an immediate ceasefire and after France's United Nations envoy predicted an imminent military action.
Explosions shook Benghazi while a fighter jet was heard flying overhead, and residents said the eastern rebel stronghold was under attack from Gadhafi's forces.
"The explosions started about 2 a.m. Gadhafi's forces are advancing, we hear they're 20 kms from Benghazi," Faraj Ali, a resident, said.
"It's land-based fire. We saw one aircraft," he added.
Libya had declared a unilateral ceasefire on Friday after the United Nations Security Council authorized a no-fly zone over Libya, but the United States said the ceasefire was not being respected.
Libyan rebels said on Saturday they were being forced to retreat by Gadhafi's forces.
"They were 60 km away yesterday, today they are 20 kms away and they can be here in a half hour to 90 minutes," rebel fighter Khalid Ahmed told Reuters at a rebel base on the western edge of the city.
Elsewhere in the city, rebels also reported skirmishes and strikes by Gadhafi forces.
"Fighter jets bombed the road to the airport and there's been an air strike on the Abu Hadi district on the outskirts," Mohammed Dwo, a hospital worker and a rebel supporter, told Reuters.
He was speaking at the scene of an apparent firefight between rebels and what they claimed were two mercenaries who had infiltrated the city and were driving in a car which they said contained a crate of hand grenades.
The two men, in civilian clothes, had been shot and killed and rebels produced blood-soaked identity papers they said showed them to be of Nigerian nationality.
"We were sitting here and we received gunfire from this vehicle then we opened fire and after that it crashed," rebel fighter Meri Dersi said.
Jamal bin Nour, a member of a neighborhood watch group, told Reuters he had received a call to say government forces were landing by boat, but it was impossible to confirm the information.
The city has been so rife with rumors and hearsay that it is virtually impossible to verify due to lack of communications.
A unilateral ceasefire declared on Friday by the Libyan government appeared to have done little to convince outside powers to hold off on plans for air strikes to force an end to an increasingly bloody civil war.
Residents in the rebel-held western city of Misrata said they faced heavy bombardment on Friday -- a charge the government denied -- while a U.S. official said Gadhafi's forces were still advancing towards the rebels' eastern stronghold Benghazi.
Within hours of President Barack Obama saying the terms of a UN resolution meant to end fighting in Libya were non-negotiable, his UN envoy, Susan Rice, asked by CNN whether Gadhafi was in violation of these terms, said: "Yes, he is."
Gadhafi said there was no justification for the UN resolution.
"This is blatant colonialism. It does not have any justification. This will have serious consequences on the Mediterranean and on Europe," he said in comments reported by Al Jazeera television.
France, which along with Britain has been leading a drive for military intervention, will host a meeting on Saturday on Libya which will be attended by U.S. Secretary of State Hillary Clinton and Arab leaders.
"So I guess that after this summit, I think that in the coming hours, I think we will go to launch the military intervention," the French ambassador to the United Nations ambassador Gerard Araud told BBC's Newsnight.
Obama made clear any military action would aim to change conditions across Libya -- rather than just in the rebel-held east -- by calling on Gadhafi's forces to pull back from the western cities of Zawiyah and Misrata as well as from the east.
"All attacks against civilians must stop," Obama said, a day after the UN Security Council passed a resolution authorizing international military intervention.
A U.S. national security official, who spoke on condition of anonymity, later said the troop movements by Gadhafi's forces towards Benghazi were "purposeful". The assessment was based on official reporting reaching U.S. national security agencies.
It was impossible to contact anyone on the frontline far to the west of Benghazi to find out what was happening. But in Benghazi, rebels dismissed the ceasefire declaration as a ruse.
"He is lying. His troops are advancing. We don't believe what Gadhafi says," said Mohammed Ishmael al-Tajouri, from the rebel coalition in Benghazi. "When he comes to Benghazi he will be fighting. There is no negotiating with Gadhafi."
In Tripoli the government said there had been no bombing since it announced the ceasefire.
"We have had no bombardment of any kind since the ceasefire was declared," Deputy Foreign Minister Khaled Kaim told journalists when asked about reports of continued government operations in Misrata and other parts of the country.
Kaim said Libya was asking China, Germany, Malta and Turkey to send observers to monitor its adherence to the ceasefire.