Ras Lanouf, Libya • Moammar Gadhafi's forces hammered rebels with tanks and rockets, turning their rapid advance into a panicked retreat in an hours-long battle Tuesday. The fighting underscored the dilemma facing the United States and its allies in Libya: Rebels may be unable to oust Gadhafi militarily unless international airstrikes go even further in taking out his forces.

Opposition fighters pleaded for strikes as they fled the hamlet of Bin Jawwad, where artillery shells crashed thunderously, raising plumes of smoke. No such strikes were launched during the fighting, and some rebels shouted, "Sarkozy, where are you?" — a reference to French President Nicolas Sarkozy, one of the strongest supporters of using air power against Gadhafi.

World leaders meeting in London agreed that Gadhafi should step down but have yet to decide what additional pressure to put on him.

"Gadhafi has lost the legitimacy to lead, so we believe he must go. We're working with the international community to try to achieve that outcome," said U.S. Secretary of State Hillary Rodham Clinton after the talks concluded.

German Foreign Minister Guido Westerwelle said it "has to be made very clear to Gadhafi: His time is over." But Germany and other countries have expressed reservations about the current military intervention in Libya, let alone expanding it.

France has struck a more forceful tone. Defense Minister Gerard Longuet told France-Inter radio that Paris and London believe that the campaign "must obtain more" than the end of shooting at civilians.

The rout of the rebels Tuesday illustrated how much they rely on international air power.

Only a day earlier, they had been storming westward in hopes of taking Sirte, Gadhafi's hometown and a bastion of his support in central Libya. They came within 60 miles of the city before they were hit by the onslaught from Gadhafi's forces, driving them east to Bin Jawwad under barrages of rocket and tank fire.

Many of the ragtag, untrained volunteers who make up the bulk of the rebel forces fled in panic. However, some of them backed by special-forces soldiers from military units that joined the rebellion took a stand in Bin Jawwad, bringing up truck-mounted rocket launchers and returning fire.

The two sides traded salvos for hours, drilling Bin Jawwad's buildings with shrapnel and bullet holes.

The steady drum of heavy machine gun fire and the pop of small arms could be heard above the din, as people less than a mile outside the village scaled mounds of dirt to watch the fighting.

But by the afternoon, rebels fled further east, their cars and trucks filling both lanes of the desert highway as they retreated to, and even beyond, the oil port of Ras Lanouf, roughly 25 miles away. Some loyalist forces had reached the outskirts of Ras Lanouf, where the thud of heavy weapons was heard and black smoke rose from buildings.

"If they keep shelling like this, we'll need airstrikes," said Mohammed Bujildein, a 27-year-old rebel fighter. He was gnawing on a loaf of bread in a pickup with a mounted anti-aircraft gun, waiting to fill up from an abandoned gas tanker truck on the eastern side of Ras Lanouf.

With international strikes, he boasted, "we'll be in Sirte tomorrow evening."

It was the second time in weeks that rebel forces have been driven back from an attempted assault on Sirte. The last time, early in the month, it nearly meant the end of their movement: They retreated hundreds of miles, and Gadhafi forces nearly stormed their capital, Benghazi, until the U.S. and European strikes began 10 days ago. • President Barack Obama says the U.S. needs to increase diplomatic and political pressure on Moammar Gadhafi. But he says it's too early to negotiate an exit for the Libyan strongman.

Speaking to CBS News on Tuesday, Obama said people in Gadhafi's circle were beginning to recognize that "their days are numbered." But, he said, Gadhafi may not have reached that conclusion himself.

In an ABC interview, Obama added: "Hopefully, he's going to be getting the message soon."

• A sweeping array of world powers called forcefully Tuesday for Gadhafi to step down as Libya's ruler. Some even hinted at secret talks on his exit.

U.S. Secretary of State Hillary Rodham Clinton and British Foreign Secretary William Hague led the crisis talks in London between 40 countries and institutions, all seeking an endgame aimed at halting the Libyan leader's bloody onslaught against his people.

• U.S. officials announced that American ships and submarines in the Mediterranean had unleashed a barrage of cruise missiles at Libyan missile storage facilities in the Tripoli area Monday and Tuesday — the heaviest attack in days.

• The military intervention in Libya has cost the United States "about $550 million" in extra spending so far, said Defense Department spokeswoman Cmdr. Kathleen Kesler on Tuesday.

Combined wire services