The International Criminal Court will open an investigation Thursday into alleged crimes against humanity in Libya, the chief prosecutor's office has announced.

Prosecutor Luis Moreno-Ocampo will work with the United Nations, African Union and Arab League and request information from Interpol and other sources, the office in The Hague said Wednesday. Moreno-Ocampo will deliver a report to the UN Security Council within two months. 

A Western diplomat said it's important to investigate possible crimes committed since the rebellion began more than two weeks ago, even as battles continue between rebels and soldiers loyal to Libyan leader Moammar Gadhafi.

The investigation is designed to change the minds of people around Gadhafi, said the diplomat, who spoke on condition of anonymity. They now know the war crimes tribunal is to investigate, and if they carry out instructions from Libyan leaders to bomb, attack or use violence against civilians, they could be subject to international justice.

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Libyan leader Moammar Gadhafi, shown in July, says thousands will die if the U.S. or NATO intervenes. ((Benedicte Desrus/Reuters))

Under the treaty that established the war crimes tribunal in 2002, the court can step in only when countries are unwilling or unable to dispense justice themselves for genocide, crimes against humanity or war crimes.

U.S. Secretary of State Hillary Clinton told a Senate hearing Wednesday that the U.S. was "a long way" from deciding on the enforcement of a no-fly zone over Libya. U.S. Defence Secretary Robert Gates warned that setting up a no-fly zone meant to keep Gadhafi from attacking Libyan civilians would require an attack on the country.

British Prime Minister David Cameron also appears to be backing away from earlier hawkish statements that Britain could spearhead a no-fly campaign, CBC's Michael Colton reported. 

"Facing opposition in his own party and the cold fact that British forces haven't the firepower to do it on their own, Cameron suddenly sounds a lot less gung-ho," Colton said.

The UN, EU, Britain and Canada have hit Libya and its leadership with a series of economic, travel, arms sanctions, and an international military buildup is moving into the region, including Canada's HMCS Charlottetown.

Gadhafi denies revolt

In another development, as Gadhafi loyalists fought to regain territory from rebels, the Libyan leader told supporters in Tripoli that there are no problems in his country.

In a rambling, contradictory speech, he said on state television Wednesday that he would fight to "the last man and last woman," but he also denied there were protests in the rebel-controlled east.

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Anti-government volunteers learn how to operate an anti-aircraft gun at a training and recruitment centre in Benghazi, Libya's second-largest city. ((Asmaa Waguih/Reuters))

Gadhafi warned that "thousands of Libyans" will die if the U.S. or NATO intervenes in his country. The estimated death toll is already 2,000, but Gadhafi said that's an exaggeration.

He said Libya's oilfields and ports are "safe" and "under control," and the country will replace Western banks and companies with others from China, Russia and Brazil.

Gadhafi reiterated that al-Qaeda is to blame for any unrest.

Gadhafi loyalists, rebels battle

There were reports Wednesday that rebels had won a key battle for control of an oil installation and an airstrip on the Mediterranean coast. The fighting was centred on the oil facilities at Brega, which the opposition has held for days.

Adjabiya, Libya

Brega is about 200 kilometres from Libya's second-largest city, Benghazi, the nerve centre of the rebel-held east.

At the nearby rebel-held city of Ajdabiya, a tank along with pickup trucks full of anti-Gadhafi fighters carrying automatic weapons departed for the oil port, 70 kilometres away.

Witnesses told The Associated Press they saw two warplanes bomb the eastern part of the town at 10 a.m. local time. BBC reporter John Simpson reported seeing a "great plume of black smoke" go up after the bombing.

Many people in Benghazi are concerned Gadhafi's forces may be moving east, CBC reporter Tom Parry said.

"There's been some mobilization of the militia here, people saying they're ready to defend Benghazi and defend the east," Parry reported.

He said truckloads of armed anti-government forces were streaming out of a military base in Benghazi.

"In Benghazi, where people have gathered every day to celebrate what they had hoped would be a quick victory over Gadhafi's regime, the government's latest offensive is a reminder there could be much more bloodshed," Parry said.

Anti-government demonstrators are demanding Gadhafi step down, but the longtime leader has resisted those calls.

Some experts think Ghaddafi will try to maintain control over cities and enclaves in the west of the country, while carrying on a grinding war against rebel-held areas in the east.

"It'll be sort of a de facto partition of the country," said Peter Juul of the Washington-based Centre for American Progress.

France, Britain to help with exodus

At least 180,000 people have fled Libya, with more arriving at the Tunisian border daily. The United Nations says there is an urgent need for food, water and shelter for displaced people.

After days of chaos at the Libyan-Tunisian border, some degree of order is emerging, the CBC's Margaret Evans reported.

"The situation at the border was calmer today," she said. "The Tunisian side is taking on a much more permanent and organized feel — lineups for hot tea, oranges and bread."  

European nations and Egypt launched emergency airlifts along Libya's borders Wednesday.

As many as 1.5 million Egyptians work in Libya, a country with a population of 6.5 million.

The French Foreign Ministry says the operation will involve large airliners and a French navy ship heading to the region. The operation will allow the evacuation of at least 5,000 people over the course of a week, and is being carried out in co-ordination with the European Union.

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Egyptians who fled unrest in Libya wait to board a ship in the eastern Tunisian port of Zarzis on Tuesday. ((Anis Mili/Reuters))

British Prime Minister David Cameron announced Wednesday that the U.K. will also be sending aircraft to pick up 8,800 stranded Egyptians.

CBC's Adrienne Arsenault reported from the Tunisian port town of Zarzis that two Egyptian military ships had arrived to rescue Egyptians fleeing the country.

But Arsenault said that while 1,000 people board a ship, twice that number will arrive at the border crossing of Ras Jdir.

Human Rights Watch warned that the fleeing African workers were "particularly under threat due to popular anger" over Gadhafi's mercenaries.

The CBC's Margaret Evans spoke with a man from Mali who confirmed that dark skin colour was enough to draw threats from anti-government rebels. 

Egypt and Tunisia, which have undergone their own political upheavals, are ill-equipped to deal with the huge volumes of people.

Many refugees are from countries that could not afford evacuations, while others are sub-Saharan African workers whose lives are in danger because they are being mistaken for mercenaries hired by Gadhafi.

Arsenault said most of the people fleeing are young men, who are resilient but still in need of shelter and food. Doctors said there has been no disease, but people have been injured in the crush of crowds, Arsenault said.

"The Tunisians who had opened their homes and their schools, who were driving up in their own cars, are now standing back saying, 'Wow, there's not much more we can do,' " Arsenault said.  

The 57-nation Organization of the Islamic Conference said it would set up two field hospitals and provide ambulances on the Tunisian and Egyptian borders with Libya. It also planned to provide temporary shelters for 10,000 people and hand out flour, sugar, rice, canned food and infant formula.

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With files from The Associated Press