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By MARGARET COKER in Tripoli, CHARLES LEVINSON in Benghazi, Libya, and ADAM ENTOUS in Washington

Agence France-Presse/Getty Images

Libyan rebel fighters flash the victory sign as they look at an fighter jet flying overhead after dropping a bomb near a checkpoint on the outskirts of the oil town of Ras Lanuf on Monday.

Forces loyal to Col. Moammar Gadhafi launched air strikes on a rebel-held town Monday to check the rebels’ advance west toward the capital, as the United Nations called on Libyan authorities to end hostilities and appointed a special envoy to the country.

WSJ’s Margaret Coker reports on major battles between forces loyal to Col. Moammar Gadhafi and rebel in key cities along Libya’s coast. Oil prices have breached $106/barrel as a result. Also, Jon Hilsenrath on demand for U.S. grain outpacing supply.

An air strike hit Ras Lanouf, a key oil port east of Tripoli, but there were no casualties, the Associated Press reported. Mohamad Samir, an army colonel fighting with the rebels, told AP that his forces are expecting reinforcements from the east. A day earlier, a heavy assault by pro-regime forces stalled the rebels’ advance toward Sirte, the hometown and a stronghold of Col. Gadhafi.

Crude oil prices rose close to two and a half year highs Monday on worries that the heavy fighting would damage oil infrastructure, with crude oil for delivery in April hitting a high of $106.82 a barrel on the New York Mercantile Exchange.

Attacks by pro-Gadhafi forces against the rebels over the weekend failed to win the government much ground, increasing the likelihood of a prolonged standoff in the North African country. The escalation in hostilities prompted U.N. Secretary-General Ban Ki-Moon to call on Libyan authorities to end the “government’s disproportionate use of force and indiscriminate attacks on civilian targets.” The secretary-general urged Libya, in a telephone conversation Sunday with Libyan foreign minister Musa Kusa, to lift media restrictions and allow humanitarian organizations freedom of movement.

Violence in Ras Lanouf

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KIim Ludbrook/EPA

Rebel fighters tried to fire at a Libyan Airforce aircraft near Ras Lanouf Monday.

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The secretary-general appointed Abdelilah Al-Khatib, the former Jordanian foreign minister, as his special envoy to Libya to consult with authorities in Tripoli and the region on the “humanitarian situation as well as the wider dimensions of the crisis,” Mr. Ban’s spokesman said. Mr. Kusa agreed to the immediate dispatch of a U.N. humanitarian assessment team to Tripoli, he said.

In the U.S. on Sunday, Sen. John McCain of Arizona, the top Republican on the Armed Services Committee, and Senate Republican Leader Mitch McConnell of Kentucky urged the U.S. to consider various moves that would mark a sharp escalation in American involvement.

Speaking on ABC’s “This Week,” Mr. McCain said the U.S. can help the rebels now by pumping in humanitarian assistance; by providing technical assistance, intelligence and training; and by declaring support for a provisional government. Mr. McConnell of Kentucky, speaking on CBS’s “Face the Nation,” said that “arming the insurgents” could be an option, citing as a possible model U.S. efforts against the Soviets during the Cold War.

Administration officials said later on Sunday that President Barack Obama is considering various options, but he wants any action, such as the establishment of a no-fly zone over Libya, to be closely coordinated with international allies. The U.S. is cautious right now about providing military assistance to the rebels, on the grounds that Washington doesn’t know what aid is needed, who their leaders are and whether they can be trusted longer term.

Assaults launched Sunday afternoon by forces loyal to Col. Gadhafi, which employed tanks, jets, helicopter gunships and heavy artillery, foundered in the key central-coastal city of Misrata, sandwiched between the government’s two major strongholds of Tripoli and Sirte, according to residents.

But government forces succeeded in stopping an advance by rebels on Sirte from their capital, Benghazi, in the east, and Monday’s air strikes kept the rebels on the defensive.

Col. Gadhafi’s military is larger and better equipped than the rebels, but it faces the daunting task of having to dislodge rebels from heavily populated urban settings and in remote desert locations. The rebels have been strengthened by defections of soldiers with equipment.

Government officials deny that the rebels have outmaneuvered them or have battled them to a stalemate. Libyan Deputy Foreign Minister Khalid Kaim says the military could crush the rebellion at will, but that it is under orders not to attack in heavily populated areas for fear of causing great loss of life.

Fighters united under the rebel command in Benghazi, and opposition forces working independently in towns like Misrata and Zawiya, have managed to rebuff multiple attacks by government troops. But they haven’t been able to crack the regime’s hold on the capital or on Sirte.

Troops loyal to Gadhafi launched counter-offensives against rebel-held towns, increasing fears that Libya is heading for a protracted civil war. Video courtesy of Reuters

Rounds of bullets and gunfire were heard in Libya’s capital early Sunday morning. Video courtesy of Reuters.

One retired Western military officer on the ground in Libya says the government could take out rebel positions in Zawiya, for example, about 30 miles from Tripoli, if it were ready to accept huge collateral damage and civilian deaths. It is unclear whether the government has the resources to mount such an effort in more than a few places.

The accounts of Sunday’s battles provided by residents and witnesses conflicted with government reports. State television and a government spokesman announced that armed forces had won back Misrata and Ras Lanuf, as well as Benghazi, the country’s second-largest city, and the eastern border town of Tobruq.

Residents of Benghazi and Tobruq said there were no signs of pro-Gadhafi forces in their areas. Residents and journalists in Ras Lanuf contacted Sunday morning said the city remained under rebel control.

In Misrata, the country’s third-largest city, residents said the government’s offensive didn’t start until afternoon—six hours after state television announced a government victory.

Tank columns rolled into the city center from three directions, but an estimated 100 townspeople fought back over four hours, according to two residents reached by phone. Abdel Fatah al-Misrati, one of the rebels, said the rebel commanders intentionally opened the way for government tanks to enter the city, then surrounded them and attacked with antiaircraft guns and mortars.

By 4:30 p.m., the heavy artillery had ceased, and the city’s local radio station was broadcasting news that the town was still free of government control. Misrata’s civil-defense groups have fought off multiple assaults by the government over the past week.

Earlier Sunday, heavy machine-gun fire erupted before dawn in the Libyan capital, including in the neighborhood of Col. Gadhafi’s residence, as his supporters poured into the streets after state television broadcast the claims that the government’s armed forces had recaptured key areas around the country.

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Rebel fighters said their westward push stalled on Saturday night after they appeared to have walked into an ambush in the small coastal city of Bin Jawad, which lies about 25 miles west of Ras Lanuf. Townspeople had led them to believe the city was clear of pro-Gadhafi forces, but when the rebel vanguard entered the village, they were surrounded and fired upon from houses around them, said rebel fighters who escaped.

“The villagers betrayed us,” said Mohammed Salah, 21 years old, a rebel fighter reached by phone. “We had to retreat, the explosions are coming nearer and nearer.”

The push back by government forces over the weekend continues a pattern of attack and counterattack between rebel forces in the east and pro-government forces.

As of Sunday evening, the government retained full control of Tripoli, home to two million of the country’s approximately six million people, and Sirte, while most of the remaining key coastal cities were under rebel control.

One of the first international attempts to reach out toward the Libyan rebel government in Benghazi appears to have hit a roadblock. An eight-man British delegation that arrived unannounced to establish contacts with the rebels was arrested after it landed by helicopter outside of the Libyan port, rebel officials said on Sunday. Those arrested identified themselves as a British diplomat with a security detail. A rebel spokesman said the team had been released and had left Libya.

In the U.S., White House Chief of Staff Bill Daley, speaking on NBC’s “Meet the Press,” played down the chance the U.S. would act alone. “As the president said, all options are all on the table. But this has to be an international effort,” he said.

Senior Obama administration officials said it would be difficult for the U.S. to enforce a no-fly zone without the direct participation of key North Atlantic Treaty Organization allies with major air bases near Libya, particularly in Italy. U.S. officials said NATO planners were meeting daily to prepare options for defense ministers scheduled to discuss Libya on Thursday.

Sen. John Kerry, a Massachusetts Democrat who heads the Foreign Relations Committee, told “Face the Nation” the U.S. can do more to “bolster the opposition,” but he offered no details. Mr. Kerry said the U.S. and its allies should plan for a no-fly zone but not implement it right away. Short of enforcing a no-fly zone, Mr. Kerry said the country’s runways could be bombed to make it harder for Col. Gadhafi to use aircraft to attack the opposition.

—Sam Dagher, Joe Lauria and Alistair MacDonald contributed to this article.

Write to Margaret Coker at margaret.coker@wsj.com and Charles Levinson at charles.levinson@wsj.com

“A business without a sign is a sign of no business”. This is an advertising banner or quotation that can be seen in large billboards along the roads and on the side or top of buildings that is vacant. Television and radio would say, “This program would not be shown or be heard without advertisement”. It is true since most of us are watching the free television channel and programs are produced by payments of advertisements. Read the rest of this entry »

It used to be taboo for movie stars to do advertising for products in the United States. We never used to see our favorite movie star in commercials for Frosted Flakes. Catherine Zeta Jones recently broke this unspoken rule by appearing in a series of T-Mobile advertisements. While it is anyone prerogative on how they want to make money, I can understand why movie stars try to avoid getting involved in advertising for products or services. Charity advertising is one thing. Many movie stars do commercials and public service announcements for charities. However, hawking products for Madison Avenue might not be a good idea for movie stars. It can be difficult to play a serious cop role in your newest movie when you are known as the peanut butter guy from television. In short, movie stars and advertising just do not mix. Read the rest of this entry »