Time was running out for Libya's revolution last night as Muammar Gaddafi's forces routed rebels in the east of the country, driving them into retreat from the town of Brega under a rain of rockets and shells, and opening up the road to the principal opposition stronghold, Benghazi.

With western countries paralysed by disagreements over military intervention, the exhausted and terrified rebel army piled into pickup trucks with machine-guns mounted on the back or towing anti-aircraft guns and raced away from a sustained assault by rocket launchers and artillery to which they were ill equipped to respond.

The Gaddafi forces' advance came as Hillary Clinton, the US secretary of state, prepared to travel to the region to meet representatives of the rebels' revolutionary council. Clinton's trip follows an unprecedented Arab League call for the imposition of a UN-backed, western-led no-fly zone to assist the rebels.

But with pro-regime forces advancing rapidly eastwards and encamped around Libya's third city, Misrata, and with President Barack Obama still resisting pressure for a no-fly zone, it seemed increasingly likely that any western help might come too late to save the uprising from defeat.

Suliman Refadi, a doctor fleeing Brega hospital, said the town had come under intense bombardment. "They shot 40 to 60 rockets at the same time. The sky was raining with rockets, with shrapnel. There was heavy artillery. Then they advanced," he said. "It was impossible to stay."

Refadi said the victims included a seven-year-old boy who had lost part of his brain and was expected to die. He said he also saw four civilians, three men and a woman, dead beside the road.

State television in Tripoli said: "Brega has been cleansed of armed gangs."

The rebel military commander, Abdel Fattah Younis, Gaddafi's former interior minister who defected to the revolutionaries, last night described the chaotic retreat as a tactical withdrawal and promised a vigorous defence of the next major town threatened by the regime's forces, Ajdabiya.

The town of 135,000 people is the last major obstacle for Gaddafi's forces before Benghazi, the seat of the revolutionary council, 100 miles up the coast.

Younis said Gaddafi's forces had been principally concerned with seizing control of oil facilities during their gains of recent days. He said that while they have been able to cross large areas of desert they would not be able to overcome resistance in larger towns still held by the revolutionaries which had already driven Gaddafi's forces out, sometimes in fierce fighting, at the beginning of the uprising nearly a month ago.

"What we're trying to do is draw him into a situation where the fight is more even," Younis went on. "Ajdabiya is very important and we feel that [Gaddafi] will have some serious difficulties ... In all the eastern cities [under rebel control], all the people are armed. In the unlikely event our armed forces fail, he will face the people."

But while Younis pledged to fight for Benghazi street by street, some residents were openly discussing escape routes to Egypt.

Retreating rebels complained about the lack of tangible support from foreign governments. "Where is France? Where is America? Why don't they give us the big guns to fight?" said Wanis Kilani, a uniformed rebel driving a pickup truck with a machine-gun mounted on the back.

The regime's assault on Brega came after it seized control of the oil town of Ras Lanuf on Saturday. With the rebel line broken, Gaddafi's forces had little trouble moving on to Brega about 90 miles away.

Ajdabiya is a gateway to Benghazi and the oil refineries of Tobruk, also under rebel control.

Ajdabiya sits on a junction, with one branch leading to Benghazi and the other to the oil refineries of Tobruk, which is also under rebel control.

Clinton was to travel to Egypt and Tunisia on Tuesday, her first visit since the recent popular uprisings. Officials from the Benghazi-based rebel council are expected to travel to meet her. The venue and timing of the meeting have not been disclosed.

It was not immediately clear whether Catherine Ashton, the EU's foreign policy chief, would also seek to make contact with the Libyan rebels. Like the US, the EU has demanded Gaddafi's resignation and an end to the violence but has stopped short of endorsing military intervention.

The Arab League's unanimous decision at the weekend to ask the UN security council to impose a no-fly zone was an extraordinary step, given its historical opposition to western intervention in the region.

Describing Gaddafi's government as "illegitimate", the league has suspended Libya's membership and begun talks with the rebels, although it has not formally recognised the council in Benghazi.

The league's decision, which highlighted "serious crimes and great violations" by the Libyan regime, increased pressure on Obama to drop US objections to a no-fly zone.

The US, Nato and the EU say military intervention would be justified if there were demonstrable need to prevent criminal atrocities on the ground, if there were a sound legal basis (such as a new UN security council resolution) and if there were strong regional support. Some US officials doubt whether a no-fly zone would make any difference to the outcome, as most of the regime's attacks use ground forces.

William Hague, the foreign secretary, suggested the requirement for regional support had been all but satisfied. "In brutally repressing a popular uprising by his own people, it is clear [Gaddafi] is isolated and ignoring the will of the international community. The Arab League call for a NFZ [no-fly zone] is significant and provides important regional support to the option of creating a NFZ," he said.

France also welcomed the Arab League decision and said it was stepping up efforts to get UN agreement for action. But while the White House said the league's declaration of support was an "important step", it did not say whether it viewed it as definitive.

Attention may soon shift to the UN security council, where British and French diplomats, supported by Lebanon, have drawn up a draft resolution on a no-fly zone on a contingency basis.