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Libyan rebel fighters pushed back into Brega on Monday, seizing half of the hard-fought oil town and pledging to drive out Moammar Gadhafi's forces in an advance that would open a vital conduit for oil sales by the opposition.
Control of Brega's small refinery and Mediterranean port could significantly boost the rebels' hunt for revenues they can use to purchase heavy weapons for the fight against Gadhafi's better-equipped troops and militiamen.
Lightly armed and loosely organized opposition forces have surged into and beyond Brega several times in recent weeks from their strongholds in eastern Libya, only to be driven out by Gadhafi loyalists exploiting the rebels' inability to hold territory.
In recent days the opposition has placed the front lines under the control of former military men, creating a more disciplined advance against Gadhafi's forces.
"We're more organized now, and that's played a big role," said Salam Idrisi, 42, a rebel fighter.
The opposition advanced under artillery fire throughout the day and took the streets of New Brega, a largely residential section separated from the town's oil facilities by a stretch of highway and a university campus, where the rebels were battling Gadhafi fighters at close range.
"New Brega is under control of our forces and we are mopping up around the university," said Lt. Muftah Omar Hamza, a former member of Libya's air force who had a satellite phone and a GPS around his neck.
The rebels also saw success Monday in their efforts to establish an internationally recognized government in eastern Libya, forging tighter links with Britain and Italy, both potentially major markets for Libyan oil.
Italy offered diplomatic recognition to the Libyan opposition council, becoming the third country to do so after France and Qatar. The Italian foreign minister also said the CEO of energy company Eni had visited the rebels' de facto capital, Benghazi with the aim of resuming oil ties.
Meanwhile Monday, the U.S. military pulled its warplanes from front-line missions and shifted to a support role in the Libyan conflict, a NATO official said.
Britain, France and other NATO allies will now provide the fighter and attack jets to conduct intercept and ground attack missions as they enforce a no-fly zone over the North African country.
U.S. Secretary of Defence Robert Gates has told Congress the country would continue to provide assets that other countries don't have in sufficient numbers. These will likely include AWACS air surveillance planes, electronic reconnaissance aircraft and aerial refuelling tankers.
American air power — including air force AC-130 gunships and A-10 Thunderbolts and marine corps AV-8B Harriers — will still be available to back up the allies in case of need.
U.S. aircraft currently account for 90 of the 206 planes deployed by NATO in the Libyan conflict.
Meanwhile, an envoy for Moammar Gadhafi told Greece's prime minister Sunday that the Libyan leader was seeking a way out of the crisis.
Abdul-Ati al-Obeidi will travel next to Turkey and Malta in a sign that Gadhafi's regime may be softening its hard line in the face of the sustained attacks.
"The message that they're bringing is that they want the violence to end," CBC reporter Carolyn Dunn said, adding that this was the first envoy from the Gadhafi regime to attempt this kind of negotiation since the NATO airstrikes began.
However, the response from Europe has not been enthusiastic.
Italy recognized the Libyan opposition council on Monday as the country's only legitimate voice, becoming the second European country after France to give diplomatic recognition to the council, which is based in rebel-held eastern Libya. Qatar has also recognized the group.
"We have decided to recognize the council as the only political, legitimate interlocutor to represent Libya," Italian Foreign Minister Franco Frattini told reporters. Frattini also did not rule out delivering weapons to the Libyan rebels.
The New York Times reported Monday that two of Gadhafi's sons are proposing a solution in which one of them, Seif al-Islam Gadhafi, would take over from his father and steer the country toward a constitutional democracy. Some of Gadhafi's adversaries quickly rejected the idea that any of his powerful sons, some of whom command militias accused of attacks on civilians, might play a transitional leadership role that would undoubtedly protect the family's vast economic interests.
Britain announced Monday it will supply communications equipment to the rebels.
British Foreign Secretary William Hague also told the House of Commons that the United Nations and the European Union may consider dropping sanctions against some members of Gadhafi's regime if they abandon their support for the dictator. But Hague insisted no member of Gadhafi's inner circle would be offered immunity from prosecution for past crimes.
"In the case of anyone currently sanctioned by the EU and UN who breaks definitively with the regime, we will discuss with our partners the merits of removing the restrictions that currently apply," Hague said. "Sanctions are designed to change behaviour and it is therefore right that they are adjusted when new circumstances arise."
Hague told lawmakers that Britain had responded to a request for telecommunications equipment from rebel leaders in Libya following a new round of meetings in the eastern Libyan city of Benghazi.
Like the U.S., Britain has suggested it could also supply weapons to rebel forces in some circumstances — despite a UN arms embargo covering Libya — but it has not yet made a decision to do so.
Meanwhile, Britain's Foreign Office said officials are meeting with Scottish authorities to discuss their access to Libya's former foreign minister, Moussa Koussa.
Scottish prosecutors want to interview Koussa about the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, which killed 270 people — most of them Americans.
Koussa fled to Britain last Wednesday and resigned his post with Gadhafi's government.
Libya acknowledged responsibility for the Lockerbie bombing in 2003. Scottish authorities believe Koussa may hold vital information on who ordered the plot.
Koussa has been questioned by British diplomats and intelligence officials since Wednesday. The Foreign Office has declined to disclose any details.With files from CBC News