The Libyan Army appeared on state television on Wednesday to set a deadline for residents to leave Benghazi by midnight local time ahead a planned operation to "cleanse" the city, Sky News reports.
"The army is coming to cleanse your city of armed gangs," the Libyan army said in the statement.
Qaddafi's son says the rebel stronghold will fall to government forces within 48 hours.
"All the armed forces in the eastern area who have not joined the traitors are called upon to join the forces as they advance towards Benghazi," the message said, according to Reuters.
Saif al-Qaddafi told France-based Euronews Wednesday that any decision taken by the United Nations would come "too late," according to Sky News.
"Everything will be over in 48 hours," he told Euronews.
The U.N. Security Council reached an agreement late Wednesday on the text of a draft resolution on Libya, which will be up for vote Thursday.
This comes as Muammar al-Qaddafi intensified offensives in the east and the west Wednesday with relentless shelling aimed at routing holdout rebels and retaking control of the country he has ruled with an iron fist for more than four decades.
As Qaddafi's forces gained momentum, the rebels lashed out at the West for failing to come to their aid.
"People are fed up. They are waiting impatiently for an international move," said Saadoun al-Misrati, a rebel spokesman in the city of Misrata, the last rebel-held city in the west, which came under heavy shelling Wednesday.
"What Qaddafi is doing, he is exploiting delays by international community. People are very angry that no action is being taken against Qaddafi's weaponry."
The breakdown of rebel defenses in Ajdabiya, 480 miles southeast of Tripoli, threatened to open the gateway to the long stretch of eastern Libya that has been in the control of the opposition throughout the monthlong uprising. Its fall would allow regime forces to bombard Benghazi, Libya's second largest city and the de facto capital of the opposition, by air, sea and land.
Qaddafi's forces continued shelling the city of 140,000 people overnight and throughout the morning with relentless artillery fire and little resistance from the rebels.
An activist hiding out in the city said the rebels were lightly armed but still managed to ambush a group of regime troops marching into the city on foot late Tuesday, but the victory was short lived. Artillery shelling was ongoing, he said.
"The rebels set a trap and managed to take over four tanks, but now I see none of them," Abdel-Bari Zwei said when reached by telephone. "Ajdabiya is witnessing unprecedented destruction. This is the end of the city."
Residents in Ajdabiya fled either to tents set up outside the city or 140 miles northeast to Benghazi.
"The shelling hasn't stopped since last night. The residential areas are under attack," Zwei said, adding that the hospital had been overwhelmed and many of the injured had to be taken to Benghazi.
The city was besieged from the west, where Qaddafi's brigades were deployed from his stronghold of Sirte, and from the north with a warship in the Mediterranean Sea.
"The city is sealed off from the south, from the west and the northern Zwitina port by a warship," he said.
Libyan state television aired calls for the opposition to stop fighting, apparently hoping to sway populations in the east away from support of the rebels.
Ajdabiya has been a key supply point for the rebellion, with ammunition and weapons depots. Until now, the Qaddafi forces' offensive toward the east has battled over two oil ports on the Mediterranean Sea, and Ajdabiya is the first heavily populated city in the area they have tried to retake.
It was a major setback to the rebels, who less than two weeks ago were poised to march on Tripoli, the capital, and had appeared capable of sweeping Qaddafi out of power, inspired by successful uprisings in Egypt and Tunisia. But the regime's better armed and organized military has reversed the tide as efforts led by France and Britain to create a no-fly zone to protect the rebels foundered.
Oil prices rose to above $98 a barrel Wednesday in Asia as fears that clashes in Libya and the Gulf kingdom of Bahrain could further disrupt crude supplies outweighed concern Japan's disaster will crimp demand.
Qaddafi warned rebels: "There are only two possibilities: Surrender or run away."
He said he was not like the Tunisian or Egyptian leaders who fell after anti-government protests. "I'm very different from them," he said in an interview published Tuesday in the Italian newspaper Il Giornale. "People are on my side and give me strength."
In a separate appearance, Qaddafi addressed supporters in Tripoli late Tuesday, calling the rebels "rats" and blasting Western nations. "They want Libyan oil," he said.
During his appearance, a crowd watching on a TV projection on a wall in Benghazi shouted curses and threw shoes at the image, in video broadcast live by Al-Jazeera satellite TV.
Qaddafi's forces also launched an attack on Misrata -- which for days has been under a punishing blockade, its population running out of supplies. The barrage came a day after the government recaptured the last rebel-held city west of Tripoli, solidifying his control over the coastline from the capital to the Tunisian border.
"There is coordinated shelling by Qaddafi's brigades firing artillery and machine guns from three different city entrances," rebel spokesman Saadoun al-Misrati said, speaking by satellite phone.
He said the shelling began at 7 a.m. and regular telephone lines had been cut.
Europe and the United States, meanwhile, were tossing back and forth the question of whether to impose a no-fly zone that the opposition has pleaded for.
On Tuesday, top diplomats from some of the world's biggest powers deferred to the U.N. Security Council to take action against Libya, as France and Britain failed to win support for a no-fly zone in the face of German opposition and U.S. reluctance. France said the Group of Eight agreed that a new U.N. resolution should be adopted by week's end with measures to help Libyan rebels.
A U.N. resolution introduced Tuesday includes no-fly provisions. It also calls for increased enforcement of an arms embargo and freezing more Libyan assets, according to U.N. diplomats said who spoke on condition of anonymity because the text has not been released. One diplomat said the Security Council will be looking to see whether members of the Arab League, which is pressing for the no-fly zone, are ready to seriously participate in the establishment and operation of a zone.
The U.S. added sanctions Tuesday, banning business with Libya's foreign minister and 16 companies it owns or controls.
Supporters of a no-fly zone tried once again on Wednesday to persuade reluctant members to back the resolution.
French President Nicolas Sarkozy called on leaders of the 14 other Security Council nations to "fully shoulder their responsibilities and give support to this initiative."
"Together, we can save the martyred people of Libya," he wrote in a letter. "It is now a matter of days, if not hours. The worst would be that the appeal of the League of the Arab States and the Security Council decisions be overruled by the force of arms."
The Associated Press contributed to this report.