Gadhafi defiant as rebels seize city

Moammar Gadhafi remained defiant Sunday, blaming outside forces for the uprising inLibya and promising to crush the opposition, Reuters is reporting.

Gadhafitold Serbian television in a phone interviewthat sanctionsimposed by the United Nations Security Councilwon't work.

In Tripoli, the capital, where Gadhafi is still in control, state banks began handing out the equivalent of $400 US in a bid to shore uppublic loyalty.

Gadhafialso saidthe opposition against him is small.

Reports on the ground painted a different picture, however. Forces opposed to Gadhafi have seized control of the key city of Zawiya, only 50 kilometres from Tripoli, the capital.

The rebel forceswere in the streets of Zawiya, preparing to repel an expected offensive bytroops loyal to Gadhafithat have encircled the western city's outskirts.

Foreign reporters who reached the city of 200,000 confirmed Sunday that rebels are in control of the city centre, where the red, green and black flag of Libya's anti-Gadhafi rebellion flew from the top of a building.

The protesters in Zawiya who are demanding an end to Gadhafi's 42-year rule include former security forces, according to CNN and BBC. The rebels have army tanks and anti-aircraft guns mounted on pickup trucks deployed in the streets, The Associated Press reported.

New Canadian airlift planned

UN officials say 100,000 people have fled Libya in the past two weeks.

Military aircraft, including twoC-17s and twoC-130 Hercules,were to be deployed to Libya fromMalta on Sunday to help with evacuation efforts, a Canadian government source told CBC News.

Theplanes might have to go to several locations simultaneously, according to the source.

Scores of refugees continue to flee the country. The UN High Commissioner for Refugees plans to set up thousands of tents to accommodate the growing number of people crossing into Tunisia.

Ordinary Tunisians have filled pickup trucks with supplies to help. Some refugees are lying in the sand at night because they have nowhere else to sleep. Others are staying at an overcrowded warehouse, the CBC's Adrienne Arsenault reported.

"Some Tunisians in this border area have opened up their homes, but they simply cannot accommodate all these people," Arsenault said Sunday.

Provisional government in Benghazi

Elsewhere, Libya's former justice minister said he and others are forming a provisional government in Benghazi, the easterncitywhere the uprisingbegan on Feb. 15.

Mustafa Abdel-Jalil defected to the anti-government protesters last Monday and spoke out against the killing of demonstrators.

He said a group of both civilian and military people will organize the government andwill prepare for elections in three months time.

Those forces and citizens have taken over government roles to keep the city operating, the CBC's Carolyn Dunn reported from Benghazi.

"It's actually quite remarkable to see.There are volunteers who are out on the streets, sweeping, directing traffic, providing security," Dunn said Sunday.

"Things are actually running quite smoothly here."

A member of the Benghazi city council, Fathi Baja, on Sunday said Abdel-Jalil was chosen by the committees running the eastern Libyan cities now in the rebellion's hands.

It was not immediately clear how much support the proposed provisional leadership commands.

The rebels now control most of the eastern half of the country.

Tens of thousands of people, a majority of them thought to beforeign workers from places like Egypt, have fled Libya.

UN approves Gadhafi travel ban, assets freeze

On Saturday, the United Nations Security Council passed a package of sanctions against Gadhafi and the Libyan regime.

The council voted unanimously to freeze the financial assets of Gadhafi, his children and his senior associates. The resolution also imposes a travel ban against them and demands an "immediate end to the violence and repression" of the regime.

In addition, the International Criminal Court has been asked to investigate events in Libya in the past two weeks to see if charges of war crimes or crimes against humanity should be laid.

The prosecutor of the ICC is mandated by the resolution to report back to the council in two months.

People in Benghazi have started gathering what they say is evidence of the Gadhafi regime's brutality.

They went to the headquarters of the internal security forces on Friday andremoved files they hope support allegations that secret police kept a list of people targeted to be killed in the streets during the protests.

It's believed as many as 1,000 people have died inthecrackdown by government forces.

The streets of Benghazi clearly show the damage from the uprising, withseveral burned-out and bullet-riddled buildings.

Late last week, anti-government activists dug up the street near one of Gadhafi's now-destroyed residences to look for hidden bunkers and tunnels, but turned up nothing.