Obama insists every option under review for Libya

Wary that Libya's bloody crisis could devolve into humanitarian chaos, President Barack Obama on Thursday insisted he is considering every intervention option, including military might, along with America's allies. To Moammar Gadhafi, he declared: "Step down from power and leave."

Obama made clear he has not ruled out establishing a no-fly zone over Libya to prevent Gadhafi's air forces from bombing rebels. His broad assurance came one day after his defense chief, Robert Gates, said bluntly that a no-fly zone would amount to an act of war and warned about too much "loose talk" of U.S. military intervention in Libya.

"I don't want us hamstrung," Obama said in defending his approach. Still, the president made clear he does not intend to act without the consent of international peers, and that the emphasis of the United States is on helping refugees, heading off a humanitarian crisis and hastening the end of Gadhafi's reign.

"There is a danger of a stalemate that, over time, could be bloody," Obama said in an appearance with visiting Mexican President Felipe Calderon. "And that is something that we're obviously considering. So what I want to make sure of is, is that the United States has full capacity to act - potentially rapidly - if the situation deteriorated in such a way that you had a humanitarian crisis on our hands."

In the Libyan capital, Gadhafi vowed, "We will fight until the last man and woman." He lashed out against Europe and the United States for their pressure on him to step down, warning that thousands of Libyans will die if U.S. and NATO forces intervene in the conflict.

Part of an upheaval across North Africa and the Middle East, the Libyan uprising has pitted anti-government protesters against the strongman who has ruled Libya for four decades. Gadhafi has unleashed a violent crackdown against those seeking his ouster, drawing international condemnation and sanctions. Hundreds have been killed, perhaps more.

Trying to impose pressure, but with only so much leverage, Obama suggested that Gadhafi loyalists should switch sides in support of the revolutionaries.

"Those around him have to understand that violence that they perpetrate against innocent civilians will be monitored and they will be held accountable for it," Obama said. "And so to the extent that they are making calculations in their own minds about which way history is moving, they should know history is moving against Colonel. Gadhafi."

Calling Gadhafi a ruler with no legitimacy, Obama said: "Colonel Gadhafi needs to step down from power and leave."

Obama offered his most extensive remarks on the Libya crisis on a day when rebels strengthened their hold on the strategic oil installation at Brega after repelling an attempt by Gadhafi loyalists to retake it.

The U.S. president announced that American military aircraft would play a humanitarian role by helping Egyptians who had fled Libya and become stranded in Tunisia. The planes are to fly them from Tunisia back to Egypt.

"You've got tens of thousands of people who are gathered at the border," Obama said. "We've got to make sure that they can get home."

Officials say U.S. aircraft could leave as early as Friday for the first mission, but details were still unfolding.

"We're ready and we've been planning for this," said Navy Cmdr. Wendy L. Snyder, a Defense Department spokeswoman.

On the prospect of a military response, Obama made clear he does not plan to have the U.S. go it alone. He said U.S. responses to the uprising in Egypt ensured that "we did not see anti-American sentiment arising out of that movement" about heavy-handedness from the United States.

"The region will be watching carefully to make sure we're on the right side of history, but also that we are doing so as a member of the world community," he said.

The Pentagon has ordered two Navy warships into the Mediterranean, but Obama did not discuss the possibility of specific military actions such as providing air cover for rebels.

The U.S., Britain and other NATO countries are drawing up contingency plans to impose a no-fly zone over Libya. But the idea has been rejected by Russia, which holds a veto-wielding seat on the U.N. Security Council.

In order to ground the Libyan air force - thereby providing air cover for the rebels - U.S. and partner aircraft would first attack Libya's anti-aircraft defenses. Freed of the threat of being shot down, U.S. and partner planes could then patrol Libya's air space and down any planes that got airborne.

Obama never mentioned the no-fly zone idea directly, but when pressed on it, he said: "That is one of the options we would be looking at."

Gates' comments on Wednesday essentially acknowledged that, short of an unlikely military offensive by a U.S.-led coalition, the options for international action to stem the violence are limited. On Thursday, Sen. John McCain, R-Ariz., took issue with Gates' comment about "loose talk" about a no-fly zone.

"May I just say, personally I don't think it's `loose talk' on the part of the people on the ground in Libya or the Arab League or others, including the prime minister of England, that this option should be given the strongest consideration," McCain said.

The unspoken subtext to Gates' remarks on Wednesday was that with U.S. forces already deeply committed in Afghanistan, still winding down military operations in Iraq and on the watch for surprises in Iran and elsewhere in the Persian Gulf region, the risks associated with military action in Libya might be unacceptable.

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Associated Press writers Robert Burns, Bradley Klapper, Donna Cassata, Pauline Jelinek and Matthew Lee in Washington and Gregory Katz in London contributed to this report.