Libyan opposition forces have surrounded the oil port of Brega in the eastern part of the country.

“We are in a position to control the area and we are deploying our forces,” a rebel army officer told an Associated Press reporter, speaking on condition of anonymity.

Brega, located more than 700 kilometers east of Tripoli, is home to the second-largest petroleum and natural gas facility in Libya. It is also considered a gateway to Ajdabiya, which connects the east to the west and south of the country.

Rebel fighters said that if the oil refinery in Brega were captured, power in Benghazi, Libya's second-largest city, could be cut off.

Warplanes flown by pro-government pilots attacked the area Thursday morning but none of dictator Muammar Qaddafi's ground troops have appeared in the oil port.

The air strike raised fears in Brega nevertheless that Qaddafi's troops, bolstered by Chadian mercenaries, would make an attempt to retake the town.

US Rules Out 'No Fly' Zone
The United States meanwhile has ruled out the idea of establishing a “no fly” zone over Libya. Defense Secretary Robert Gates told lawmakers on Wednesday, “Let's just call a spade a spade: a no-fly zone begins with an attack on Libya to destroy the air defenses.” He ruled out the option.

Qaddafi threatened the same day to “turn Libya into another Vietnam,” warning that “thousands of Libyans will die” if U.S. and NATO forces tried to intervene in the country's civil war. “We will distribute arms to 2 or 3 million,” he said.