Moamar Gaddafi has told Libyan rebels his armed forces were coming to their capital Benghazi tonight and would not show any mercy to fighters who resisted them.

In a radio address he told Benghazi residents soldiers would search every house in the city and people who had no arms had no reason to fear.

His address came as the United Nations Security Council is preparing to vote Friday morning (AEDT) on a resolution allowing a no-fly zone or air strikes to stop him.

French diplomatic sources suggest targeted air raids could start immediately if the UN approves the use of force.

Thousands of residents of Benghazi gathered in a central square, waving anti-Gaddafi tricolour flags and chanting defiance of the man who has ruled the country for four decades.

"It's over. We are coming tonight," he said. "You will come out from inside. Prepare yourselves from tonight. We will find you in your closets."

"We are coming tonight... we will have no mercy and no pity with them."

But the rebels say they will stand firm and will not be deterred by Mr Gaddafi's threats.

"We will not be intimidated by these lies and claims," Libyan National Council head Mustafa Abdel Jalil said, Al Jazeera television reported.

"Libyan cities from Ajdabiya and all of the east are under rebel control."

He says he will welcome any international action that stops "genocide".

Pro-Gaddafi forces are also battling to gain control of the town of Ajdabiya, which lies 160 kilometres from the rebel stronghold of Benghazi.

There were also fierce battles around Libya's third largest city Misrata, 200 kilometres east of Tripoli.

The rebel forces claim to have shot down two government planes attempting to attack Benghazi on Thursday and they vehemently deny they have lost the battle for Ajdabiya, the gateway to both Benghazi and Tobruk in the east of the country.

The threats raise the sense that a decisive moment has come in a month-old uprising inspired by rebellions against autocratic rule elsewhere in the Arab world.

The UN Security Council is preparing to vote on a resolution, backed by Western and Arab powers, that could open the way for air strikes to protect civilians from retribution by the man who has ruled Libya for 41 years.

The draft, submitted by France, Britain and Lebanon, will authorise a no-fly zone and "all necessary measures" to protect civilians under threat.

The United States has put more pressure on the security council to pass a resolution authorising measures including the possible bombing of government targets.

In a sharp shift in tone, under secretary of state for political affairs William Burns told senators on a foreign relations committee the

US was actively pushing for measures "short of boots on the ground".

Despite all the talk of tough UN measures, the positions of such key players and hold-outs as China, Germany and Russia, is unclear.

- ABC/wires