The U.S. began moving air and naval forces closer to Libya Monday even as embattled leader Moammar Gadhafi insisted to reporters that Libyans love him and would lay down their lives for him.

Despite an ever-louder chorus of international condemnation, Gadhafi and his supporters showed little evidence of changing tactics. Pro-Gadhafi forces were reportedly closing in on rebel-held areas near the capital, Tripoli.

U.S. Secretary of State Hillary Clinton told the UN Human Rights Council in Geneva that "nothing is off the table" as long as Gadhafi threatens Libya's citizens.

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U.S. Secretary of State Hillary Clinton tells the United Nations Human Rights Council in Geneva that 'nothing is off the table' as long as Gadhafi threatens his country's citizens. ((Denis Balibouse/Reuters))

"Gadhafi and those around him must be held accountable for these acts, which violate international legal obligations and common decency," she said.

Clinton said no military action was pending. 

U.S. Col. David Lapan told Reuters there are "various contingency plans" for the North African country, where Gadhafi's forces and rebels in the east remain locked in a tense standoff.

On Monday, Canadian Prime Minister Stephen Harper spoke with U.S. President Barack Obama on the phone about the situation in Libya.

"They discussed the need to deter violence by the Libyan regime against its own citizens, and for co-ordinated international action to address growing humanitarian needs in Libya and neighbouring countries," said Dimitri Soudas, a spokesman for the Prime Minister's Office.

The two leaders agreed to remain in close touch and help evacuate each other's citizens from Libya, as well as trying to promote peace and democracy in Libya and throughout the regions, said Soudas.

Obama also had a private meeting in the Oval Office with UN Secretary-General Ban Ki-moon.

"The UN has played a positive and very important role in efforts to end the bloodshed there and to hold the Gadhafi regime accountable and support the Libyan people," said Susan Rice, the U.S. ambassador to the UN.

"Indeed in Libya, the United Nations is demonstrating the indispensable role that it can play in advancing our interests and defending our values."

Gadhafi laughs at suggestion he give up power 

As for Gadhafi, he publicly insisted in a new media interview with three foreign journalists that Libyans support him. 

"My people love me," he told ABC, BBC and the Sunday Times of London. "They would die to protect me."

Gadhafi denied that he had used force against his people and scoffed at assertions that Tripoli has been the scene of violent protests against him and his regime. 

When one interviewer asked if he would relinquish power, Gadhafi laughed.

U.S. ambassador Rice said Gadhafi's assertion that his regime is not using force against its own people is "delusional."

Rice said Gadhafi's comments served to underline just how disconnected he is from reality. Gadhafi is "slaughtering his own people," she said.

$30B worth of Libyan assets frozen

The U.S., Canada, Britain and the UN Security Council all slapped sanctions on Libya over the weekend, and the European Union did the same Monday.

The U.S. Treasury Department said at least $30 billion US in Libyan assets have been frozen. One Treasury Department official that was the largest amount ever frozen by a U.S. sanctions order.

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Moammar Gadhafi's opponents hold nearly the entire eastern half of the country, including the stronghold of Benghazi. Gadhafi is making his stand in Tripoli. ((CBC))

There was no sign that Gadhafi or anyone working on his behalf had tried to move funds before the sanctions order went into effect, he said.

British Prime Minister David Cameron said his country is working on plans for a no-fly zone over Libya, and Reuters reported Qatar's prime minister called for Gadhafi to step down in a rare Arab call for his resignation.   

In Paris, Prime Minister Francois Fillon said France was sending two planes with humanitarian aid to Benghazi, in eastern Libya.

"It will be the beginning of a massive operation of humanitarian support for the populations of liberated territories," he said on RTL radio. 

Gadhafi makes stand in Tripoli

Meanwhile, Gadhafi's opponents, including mutinous army units, hold nearly the entire eastern half of the country, much of the oil infrastructure and some cities in the west. Gadhafi is making his stand in Tripoli and nearby cities, backed by better-armed security forces and militiamen.

In the two opposition-held cities closest to Tripoli — Zawiya and Misrata — the standoff continued between rebel forces and Gadhafi loyalists. Regime forces were trying to circle the two cities to weaken the rebels.

Reporter Margaret Coker of the Wall Street Journal told CBC News on Monday afternoon that the government had launched small-scale attacks the last three days to take back some of its lost territory.

She said it appears the government has taken back a strategically important town about 600 kilometres east of Tripoli, called R'as Lanuf, where there are a lot of oil facilities.

Coker says the government has failed to gain back any ground in the rebel stronghold of Benghazi or Misrata.

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Protesters opposed to Libyan leader Moammar Gadhafi pray in the main square in the rebel-controlled city of Zawiyah, near Tripoli, on Sunday. ((Ahmed Jadallah/Reuters) )

In the capital Monday, several hundred protesters started a march in the eastern district of Tajoura, which has been the scene of frequent clashes. After the burial of a person killed in gunfire last week, mourners began to march down a main street, chanting against the Libyan leader and waving the flag of Libya's pre-Gadhafi monarchy, which has become a symbol of the uprising, a witness said.

But once a group of pro-Gadhafi fighters appeared, the mourners quickly dispersed before the gunmen could fire a shot, the witness said. 

Earlier Monday, residents said there had been attempts to restore some kind of normalcy. Many stores downtown reopened, and Libyans lined up outside banks, wanting to receive the equivalent of $392 Cdn per family that Gadhafi pledged in a bid to shore up public loyalty.

'My kids are too afraid to leave home and they even sleep next to me at night.' — Sidiq al-Damjah, Tripoli resident

One resident told The Associated Press that the price of rice, a main staple, has quintupled since the crisis began, reaching the equivalent of $39 for a five-kilogram bag.

Some schools reopened but only for half a day. Attendance was light.

"My kids are too afraid to leave home and they even sleep next to me at night," said Sidiq al-Damjah, 41 and father of three. "I feel like I'm living a nightmare."

Gadhafi has launched by far the bloodiest crackdown in a wave of anti-government uprisings sweeping the Arab world, the most serious challenge to his four decades in power.

The EU says that Gadhafi no longer controls most of the oil and gas fields in the country.

EU energy commissioner Guenther Oettinger said control is in the hands of regional families or provisional regional leaders that have emerged from the revolt and chaos.

The unrest in the North African nation has sent global oil prices soaring, as traders worry that the unrest could spread to other OPEC members. 

With files from The Canadian Press and The Associated Press