A warplane has been shot down over the Libyan city of Benghazi as sustained bombing rocks the rebel stronghold, while some reports suggest that Colonel Muammar Gaddafi's forces have entered the city.
This is in spite of the Libyan government's announcing a ceasefire on Friday and insisting on Saturday that it is valid.
Western military intervention in the war-torn North African country is believed to be imminent.
The ABC says an AFP reporter witnessed the warplane being shot down after a military plane earlier flew low over Benghazi, followed by explosions heard from the centre of the city.
The warplane, which had been heard flying over the city for several minutes, was suddenly spotted with flames coming from the right rear, before it spun down on a residential area south of the city.
Meanwhile, Al Jazeera television is reporting that Col Gaddafi's forces have entered the city's western suburbs.
Reporters say the rebels have erected concrete barricades on the roads leading to the courthouse building where the rebel National Libyan Council has its base.
A government spokesman says there has been no attack whatsoever, and that Libya has grounded all of its air force.
The United Nations Security Council voted on Friday for miltary action, short of occupation, to protect civilians from Col Gaddafi's forces. It also imposed a no-fly zone over Libya.
US President Barack Obama says the terms of the UN resolution are non-negotiable and the Gaddafi regime must stop all attacks on civilians if Libya is to avert international military intervention.
Foreign powers ready to strike
US Secretary of State Hillary Clinton says the Libyan government will need to demonstrate it is implementing the ceasefire: words will not be enough.
Mr Obama says Colonel Gaddafi's troops must pull back from rebel-held towns, including Benghazi, and the authorities must allow humanitarian aid to reach those who need it.
Western and Arab nations have been gearing up to launch air strikes; the French Government says strikes aimed at enforcing the no-fly zone could happen "within hours".
French Foreign Minister Alain Juppe says the ceasefire will be examined at a summit this weekend involving the European Union, the Arab League and the African Union. UN Secretary-General Ban Ki-moon will also attend.
France's UN ambassador, Gerard Araud, says he expects military intervention in Libya soon after the summit.