London (CNN) -- Libyan leader Moammar Gadhafi's government has "completely lost legitimacy," and military action against the regime must continue until attacks on civilians stop and humanitarian assistance is allowed to pass freely, international diplomats meeting in London concluded Tuesday.

Envoys from more than 40 countries and organizations attended the conference and agreed to establish a "Libya Contact Group" to coordinate international response to crisis, said UK Foreign Secretary William Hague, who chaired the conference. The first meeting will be held in Qatar, he said.

The group also agreed to push for more international pressure and additional sanctions on Gadhafi's regime.

"We've said throughout that we want the Libyan people to be in the lead in determining their future, and today was a significant milestone in that process," Hague said.

The diplomats did not discuss arming the Libyan rebels, Hague said. U.S. Secretary of State Hillary Clinton said the U.N. resolution that authorized the no-fly zone would allow for the transfer of arms, but the United States has not made a decision to do so "at this time."

However, Qatari Prime Minister Hamad bin Jassim al Thani said the reliance on airstrikes should be evaluated after a while to see if the strategy is doing enough to protect civilians.

"We are not talking here about invading Libya," he said.

Speculation has centered recently on suggestions that Gadhafi might be offered refuge in another country in an effort to end the crisis. Italian Foreign Minister Franco Frattini said that "we are looking for countries" to give refuge to Gadhafi in an attempt to encourage him to leave Libya.

That does not mean Gadhafi would be granted immunity, Frattini said. But he insisted Gadhafi would be better off taking a deal that could land him before an International Criminal Court judge than trying to ride out the rebellion against him in Libya.

"He will understand sooner or later that in his country, there is no safe place for him," Fratini said.

Conference participants made no formal proclamation on the suggestion. But conference participants are united in their belief that he must leave power, Clinton said.

"We believe he must go," she said. "We're working with the international community to achieve that outcome."

Clinton began the day in London speaking with a leader of the Libyan opposition, as the United States sought to expand ties with rebel leaders fighting to oust Gadhafi.

It was the second meeting in less than two weeks between Clinton and the Libyan Interim National Council's Mahmoud Jabril, a former head of Libya's economic planning council.

Clinton wanted to gain a "clearer picture" of the opposition and how a post-Gadhafi government could look, according to a senior official who took part in the meeting.

At a news conference following the meeting, rebel leaders said they intend to "establish law and order" in Libya if they are able to dislodge Gadhafi.

"We are not going to take revenge on the streets of Tripoli and Benghazi," spokesman Mahmoud Shammam said.

Clinton later told reporters that the rebel leaders appear to be committed to democracy and respect for civil rights. She said she did not have any specific information tying specific members of the opposition to terrorist groups. U.S. intelligence reports contain "flickers" of information suggesting such a possibility, officials said.

U.S. officials have been clear that although they know some figures in the new Libyan Interim National Council, they are not ready to join France and Qatar, who have formally recognized the group as the legitimate representative of the Libyan people.

The conference drew dozens of key players, including U.N. Secretary-General Ban Ki-moon and African Union Commission Chairman Jean Ping.

"For now, we have prevented a humanitarian catastrophe," the secretary-general said in a statement. "Yet we also know air operations, alone, will not resolve the crisis. Nor will it bring about a political solution that meets the aspirations of the Libyan people."

Diplomats addressed how to enforce other aspects of this month's U.N. Security Council resolution authorizing a no-fly zone, including humanitarian aid to Libya and ways to tighten the rope around Gadhafi through sanctions and political support for the rebels.

The group also announced a pledge of support for enforcing the no-fly zone from Sweden. Al-Thani, the Qatari prime minister, said he hoped additional Arab nations would also join the effort. So far, his nation and the United Arab Emirates have joined the coalition.

It also sought to solidify NATO's command of the military campaign and create a contact group of nations seeking to provide political support for the Libyans, U.S. officials said.

Jabril also met ahead of the conference with Hague, the British foreign secretary, who said in a statement he discussed humanitarian aid and "priorities for international assistance."

The Obama administration also will send a liaison to the eastern Libyan city of Benghazi to open up a more direct line of communication with members of the opposition, a senior administration official told reporters Tuesday

Chris Stevens, a former charge d'affaires at the U.S. Embassy in Tripoli, has been appointed to deal with the opposition.

For security reasons, the official would not give specifics as to when Stevens would be in Libya, but said he would travel there "soon" in an effort to "establish more systematic interaction" with the opposition.

"This is one of the issues that still need to be sorted out" legally and logistically, the senior U.S. official traveling with Clinton said Tuesday. "We have an increasingly clear sense of a number of the Libyan leaders" in the opposition.

In a nationally televised address Monday, President Barack Obama accused Gadhafi of "brutal repression" and creating a "looming humanitarian crisis," which he said forced the United States to act along with the international community.

He said that the United States is searching for ways to make available to the opposition more than $30 billion in Gadhafi's funds recently frozen by the U.S. Treasury Department.

Gene Cretz, the U.S. ambassador to Libya, said last week the Libyan Council is "off to a good start" in organizing politically, providing basic services, and embracing a vision of human rights.

Cretz has been working out of State Department headquarters in Washington since the United States closed its embassy in Tripoli last month.

The ambassador praised a document from the council that "presented "their vision of what a future Libya would look like, and it had all the right elements in it in terms of human rights, in terms of women's rights, in terms of equal participation," he said.

But he said while the opposition's representatives "do not seem to be, at least in the statements and the actions that they've taken, in any way incompatible with the kind of ideals that we would be advocating," the United States still had more to learn about the Libyan council.

"We have to be very careful about, you know, who might be included in the future and how they go about forming a government, if in fact they have that opportunity," Cretz said.

CNN's Virginia Nicolaidis and Paula Newton contributed to this report.