Libyan rebels are retreating from the strategic town of Ajdabiya under heavy bombardment by Muammar Gaddafi’s forces, according to reports, as the international community continues to debate a possible no-fly zone to protect an anti-government uprising.

The town on Libya’s east coast is all that stands between the advance of Libyan government troops and the rebel stronghold of Benghazi and lies on a road junction from where Gaddafi’s forces could attempt to encircle the city.

via Key town ‘falls’ to Gaddafi forces – Africa – Al Jazeera English.

The fighting in Libya is going incredibly poorly for the Opposition if this is true.

Ajdabiya is, as it says, the last town before Benghazi, effective centre of the opposition forces. With Ajdabiya and Brega, cities with no more than 100,000 inhabitants, falling to Gaddafi’s forces, the way is open for him to take the coast road directly into the rebellion’s heart.

It’s also where the rebels are strongest – Benghazi is a city of around one million inhabitants, most virulently anti-Gaddafi, and many armed. Gaddafi’s forces probably number no more than 100,000, and a frontal assault on the city would be a disaster, for both sides. Far more likely will be a drastic escalation in the conflict, involving bombing Benghazi into submission.

Unless a no-fly zone is implemented within the next few days, probably by the end of the week, we could see the rebellion’s best hope of toppling Gaddafi end before it even had a chance.