Anti-government forces are vowing to take Libya's capital city Tripoli as President Moammar Gadhafi took to the airwaves again, comparing himself to Queen Elizabeth as a head of state and blaming Osama bin Laden for the revolt.
Gadhafi also insisted that he, and he alone, had the moral authority to rule the country.
Meanwhile oil prices continue to surge on worries of growing Middle East instability. Diplomatic efforts are underway to address the violent crackdown.
Could Saudi Arabia be next for violent unrest? CBN News International Reporter has more insight, following this report.
The White House said President Obama plans to call British Prime Minister David Cameron and French President Nicholas Sarkozy to discuss options to compel Gadhafi's government to end the violence against his people. Discussions have centered so far on a possible no-fly zone or economic penalties.
Battle for Tripoli
By Thursday, key Libyan towns along the Mediterranean Sea were in the hands of rebels.
In Benghazi, the second largest city in Libya, fireworks erupted as thousands celebrated the fall of that city.
Amateur video smuggled out of Libya showed a fierce fight. In between screams of Allahu Akbar, meaning 'god is great' in Arabic, tracer fire can be seen lighting up the night sky. People can be seen taking cover next to a wall to avoid being injured.
Several towns in the western part of the country have also reportedly fallen, with growing numbers of the Libyan army joining the opposition ranks.
Now, all eyes are on Tripoli, where gun battles erupted Thursday between Ghadafi loyalists and his opponents who are vowing to liberate the city.
Global Markets on Edge
The chaos has global markets on edge. Libya produces two percent of the world's oil. Now, there are real fears the instability hitting countries across the region could spread to Saudi Arabia, the number one producer of oil in the world.
Economists worry that a significant surge in oil prices could affect the economic recovery here at home.
Oil topped $100 a barrel for the first time in nearly three years. Economists say further rises could threaten global economies.
"$150 a barrel, that's the previous peak - that probably will be too much to bear," Mark Zandi, chief economist for Moody's Analytics, said. "We'll be back in recession."
The U.S. weekly average gas price per gallon increased to $3.19, up 54 cents from last year and higher than last week's $3.14. The most expensive regions for gasoline are in New England at $3.23 a gallon and California at $3.56.
Saudi Arabia said Thursday that it will consider boosting its oil production to make up for any shortfall coming out of Libya. Analysts believe it could take the Saudis roughly 24 hours to up its oil output by one million barrels per day.
Top Officials Defect
Earlier in the week, more Libyan officials began turning against Gadhafi. One of his closest aides, Ahmed Gadhaf al-Dam, announced that he has defected to Egypt in protest of the regime's bloody crackdown.
He denounced the "grave violations to human rights and human and international laws."
Also, Libya's former Justice Minister Mustafa Abdel-Jalil resigned his post on Monday. Abdel-Jalil said he has proof Gadhafi personally ordered the bombing of Pan Am Flight 103. The jetliner was blown up over Scotland in 1988, killing the 270 people aboard.
--Published Feb. 24, 2011.