Rebels apparently lost control of Ras Lanuf in the last 18 hours because coalition forces were hesitant about conducting airstrikes on Gadhafi's troops amid concerns about distinguishing civilians from the military, Sky News reported Wednesday.
The reversal of the rebels' fortunes came two days after the opposition forces pushed westward along the coastal road toward Gadhafi's army, which saw its tanks and artillery bested in five days of aerial bombardment in Ajdabiya.
The airstrikes by the multinational coalition against forces loyal to Gadhafi may have opened up a new rebel front for the opposition, rebel leaders told the Los Angeles Times.
Meanwhile, five Libyan diplomats were expelled from Britain, Sky News reported. Foreign Secretary William Hague said the diplomats could pose a security threat if they remained in Britain.
Sources told Sky News the five are considered the strongest supporters of the Gadhafi regime within the embassy.
Prime Minister David Cameron said Britain hadn't ruled out arming rebels fighting against Gadhafi's troops, adding a U.N. resolution "would not necessarily rule out the provision of assistance to those protecting civilians in certain circumstances."
However, NATO Secretary-General Anders Fogh Rasmussen told Sky News he does not think the resolution allows the coalition to arm rebels.
"The Security Council resolution is very clear in my opinion," Rasmussen said. "It requests the enforcement of an arms embargo and actually NATO has decided to participate in the enforcement of the arms embargo. We are there to protect people, not to arm people."
Libyan officials took international journalists to Mizdah Tuesday to view evidence of damage to civilian buildings the government says was caused by coalition strikes, the Times reported.
Military sites in Mizdah and Gharyan, another city hit by coalition warplanes, are on the front line against the rebel-controlled towns of Zintan and Nalut.
Reports indicate coalition airstrikes on an ammunition depot resulted in Libyan rockets striking the town's hospital, an apartment complex and a home, resulting in injuries but no deaths, the Times reported.
Adel Zintani, a rebel spokesman in Zintan, said that town was subjected to daily bombings by Gadhafi forces firing Grad missiles.
Hague Tuesday indicated Britain could accept Gadhafi going into exile as a way to end the crisis that began in mid-February with protests but disintegrated into civil war.
While saying he preferred Gadhafi be brought before the International Criminal Court, Hague said the strongman seeking refuge outside of Libya would bring about the change "most of the world and probably most of the Libyan people want to see."
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