CAIRO—Egypt's military has begun shipping arms over the border to Libyan rebels with Washington's knowledge, U.S. and Libyan rebel officials said.

The shipments—mostly small arms such as assault rifles and ammunition—appear to be the first confirmed case of an outside government arming the rebel fighters. Those fighters have been losing ground for days in the face of a steady westward advance by forces loyal to Libyan leader Moammar Gadhafi.

The...