The New York Times said thousands of mercenaries and militia were on roads headed for Tripoli, the capital and Gadhafi's stronghold, where Gadhafi appears to be strengthening his forces in anticipation of a decisive stage in the struggle for control of the country.
Opponents in Tripoli said they were making plans for their first organized protest Friday, the Times said.
A growing number of military officers and officials Wednesday said they had broken with Gadhafi over his intentions to bomb and kill Libyan civilians, the report said.
Armed militiamen strafing crowds from the back of pickup trucks killed scores in Tripoli, residents told the Times, and bursts of gunfire extended the reign of terror Wednesday.
Human rights groups say they have confirmed about 300 deaths, though witnesses suggested the number was far larger. Franco Frattini, the foreign minister of Italy said there were probably more than 1,000 dead across the country.
Italy is the former colonial power in Libya.
CNN, citing Libya's Quryna newspaper, reported the crew of a Libyan military aircraft Wednesday refused to bomb Benghazi, Libya's second largest city, and let the warplane crash in an uninhabited area southwest of the city.
The newspaper said the pilot parachuted out of the Russian-built Sukhoi-22.
CNN said Quryna has switched from reporting regime propaganda to reporting on the protests and casualties.
Al-Jazeera, the Arab cable news channel, said its correspondent reported protesters claiming control of the western city of Misurata. In an Internet statement, army officers in the city vowed "total support for the protesters," the report said.
News outlets reported Benghazi had been taken over by the opposition.
Meanwhile, Italian warplanes were said to be keeping an eye on a stalled Libyan naval vessel off the coast of Malta. Al-Jazeera reported its correspondent in Malta said tensions were rising in Italy over the civil unrest in Libya.
There were rumors in Malta that the vessel had lowered its flags, suggesting its crew was defecting.
Much of the country's east region appeared to be in the hands of protesters, al-Jazeera said.
Meanwhile, the Swedish tabloid Expressen said Libya's recently resigned justice minister, Mustapha Abdeljalil, claims Gadhafi personally ordered the Lockerbie airliner bombing that killed 270 people in 1988.
An al-Jazeera correspondent said there were no officials manning the border when the broadcaster's team crossed into Libya near Tobruk.
Maj. Gen. Suleiman Mahmoud, commander of the armed forces in Tobruk, told al-Jazeera his troops had switched sides: "We are on the side of the people."
Earlier, Libyan government officials said the country's former interior minister, who resigned to support anti-government protesters, had been kidnapped.
Abdul Fattah Younis al Abidi told CNN Wednesday he resigned earlier in the week after hearing unarmed civilians were killed in Benghazi, while Libyan state media reported that "gangs" in Benghazi had kidnapped the minister.
Libyan security forces have warned that the people responsible for Abidi's kidnapping "will be chased in their hiding places." Earlier Wednesday, Abidi said he had resigned his post to back protesters who want Gadhafi to end his rule.
"Gadhafi told me he was planning on using airplanes against the people in Benghazi, and I told him that he will have thousands of people killed if he does that," Abidi told CNN in a telephone interview.
He called Gadhafi "a stubborn man" who won't concede.
"He will either commit suicide or he will get killed," the former minister said.
Abidi urged security forces to defect and join the anti-government protesters. A number of security personnel have switched sides, and a growing number of Libyan government and diplomatic officials reportedly have resigned since the protests started Feb.15.
After Gadhafi's second televised speech in two days -- in which he vowed to kill protesters "house by house" -- thousands of his supporters went to the Tripoli's central Green Square, wearing green bandannas and carrying machetes, witnesses said.
"It looks like they have been given a green light to kill these people," one witness said.
Tripoli remained under an information blackout, with no Internet access and intermittent phone service, making independent confirmation of events difficult.
In Tobruk, on Libya's eastern Mediterranean coast near the Egyptian border, Libya's historic red, black and green flag -- barred during Gadhafi's reign -- flew over many buildings, The Wall Street Journal said.
Gadhafi, meanwhile, vowed to remain in the country "until the end."
"I am not going to leave this land. I will die here as a martyr," he said, calling the protesters "cockroaches" and "greasy rats," and blaming the unrest on foreigners, including the United States and al-Qaida.
Condemnations of the crackdown mounted, with U.S. Secretary of State Hillary Clinton describing the violence as "completely unacceptable."
The U.N. Security Council condemned Libya's use of anti-civilian violence, which it said was a "crime," and called for those responsible to be held accountable.
The League of Arab States condemned what it also called crimes against civilians and suspended Libya as a member until it responded to the people's demands.
In Brussels, the European Union suspended a framework agreement it had been negotiating with Libya.
Governments worked to get tens of thousands of foreigners out of Libya Wednesday, whether by sea or air. At least two oil companies said they were suspending some operations and evacuating workers.
Libya holds Africa's greatest oil reserves, normally exporting 1.2 million barrels a day, mostly to Europe, the U.S. Energy Information Administration said.