With the unrest continuing in Libya, Libyan leader Muammar Gaddafi said on Tuesday he would not step down despite a nationwide revolt against his rule, vowing to die in Libya as a martyr.

Speaking on national television, Ghadaffi said, "Muammar Gaddafi is not occupying a position to resign from the same way other presidents did, Gaddafi is not a president. He is a leader of a revolution."

Facing the greatest challenge to his 41-year rule, Gaddafi in a fiery, but rambling address, called protesters "rats and mercenaries" who wanted to turn Libya into an Islamic state.

"The Libyan Penal code before the revolution says, each Libyan who uses weapons against Libya is sentenced to death."

Libya's security forces have cracked down fiercely on demonstrations across the country, in which more than 200 have been reportedly killed and hundreds more injured.

"I am not going to leave this land, I will die here as a martyr,"

"I shall remain here defiant," said Gaddafi.

Earlier, witnesses streaming across the Libyan border into Egypt said Gaddafi was using tanks, warplanes and mercenaries in an effort to stamp out the growing rebellion.

The White House offered its condolences for the "appalling violence" in Libya and said the international community had to speak with one voice on the crisis.

The U.N. refugee agency meanwhile urged Libya's neighbours to grant refuge to those fleeing the unrest, which was triggered by decades of repression and popular revolts that toppled leaders in Tunisia and Egypt.

Human Rights Watch said 62 people had died in clashes in Tripoli in the past two days, on top of its previous toll of 233 dead. Opposition groups put the figure far much higher. U.N. rights chief Navi Pillay said the killing could amount to crimes against humanity and demanded an international probe.

The revolt in Libya, the third largest oil producer in Africa, has driven oil prices to a 2 1/2 year high above $108 a barrel, and OPEC said it would produce more crude if supplies from member Libya were disrupted.

Meanwhile, Gaddafi's son Saif on Sunday vowed his father would keep fighting "until the last man standing" and the Libyan leader appeared on television after days of seclusion to dismiss reports he had fled to the Venezuela of his ally Hugo Chavez.

"I want to show that I'm in Tripoli and not in Venezuela. Do not believe the channels belonging to stray dogs," said Gaddafi, who has ruled Libya with a mixture of populism and tight control since taking power in a military coup in 1969.

World powers have condemned the use of force against protesters, U.N. Secretary General Ban Ki-moon accusing Libya of firing on civilians from warplanes and helicopters. The Security Council met in closed session to discuss Libya.

Washington and Europe have demanded an end to the violence and Germany's Foreign Minister Guido Westerwelle said: "A ruling family, threatening its people with civil war, has reached the end of the line."

Demonstrations spread to Tripoli from the second city Benghazi, cradle of the revolt that has engulfed a number of towns and which residents say is now in the hands of protestors.

Residents said anxious shoppers were queuing outside stores to try to stock up on food and drink. Some shops were closed.

Spain's Repsol suspended all operations in Libya and sources said operations at cargo ports at Benghazi, Tripoli and Misurata had shut due to the violence.

Trade sources said Libyan oil port operations had also been disrupted and others said gas supplies from Libya to Italy had slowed since Late Monday, though Italy said they had not yet been interrupted..

Shell said it was pulling out its expatriate staff from Libya temporarily and a number of states were seeking to evacuate their nationals.

Also, U.S. Secretary of State Hillary Clinton said on Tuesday (February 22) Libya must end violence against protesters seeking to end Colonel Muammar Gaddafi's 41-year rule and the United States would take "appropriate steps" in time.

"We are obviously watching developments in Libya with grave concern. We have joined with the international community in strongly condemning the violence in Libya and we believe that the government of Libya bears responsibility for what is occurring and must take actions to end the violence," Clinton said.

"But we are going to have to work in concert with the international community," she added.

Witnesses streaming out of Libya into Egypt said Gaddafi had used tanks, warplanes and mercenaries to try to crush protesters who have taken to the streets following uprisings that overthrew authoritarian rulers in Tunisia and Egypt.

Earlier, the State Department said it had been unable to move any of its nonessential U.S. diplomats and embassy family members out of Libya on Tuesday and expected them to depart in coming days.

"As always the safety and well-being of Americans has to be our highest priority and we are in touch with many Libyan officials directly and indirectly and with other governments in the region to try and influence what is going on inside Libya," Clinton said.