Fears are growing that a desperate but defiant Gadhafi -- who has lost control of most of the country except for Tripoli -- may also use chemical and aerial bombardment, as Russian-made helicopters packed with firearms buzzed over the capital.
"I am beyond scared and my little daughters are beyond scared," a businessman -- who wanted to be referred to as Massin -- told AOL News today via Skype from his home in central Tripoli.
"We don't dare go out. We don't know what's going to happen. Gadhafi's guys are driving around in cars shooting at everyone to scare us. We are all fearing the worst."
President Barack Obama for the first time called for Gadhafi to step down. In a private phone conversation with German Chancellor Angela Merkel, Obama said Gadhafi must leave the country now because he has lost the legitimacy to rule.
Late this evening, the U.N. Security Council voted unanimously to impose sanctions on Gadhafi and his inner circle. Council members also referred the issue of the regime's brutal and systematic attacks on protesters to the International Criminal Court for an investigation into possible crimes against humanity.
Meanwhile, Tripoli residents and U.S.-based Libyan nationals reported increasing violence in the city -- the last real bastion of control for the embattled Gadhafi.
Cell phone video sent this morning to Al Jazeera television in Az-Zawiyah, 30 miles west of Tripoli, showed protesters yelling, "Gadhafi is the enemy of God!" -- minutes before some were brutally mowed down by gunfire.
"Gadhafi's security forces followed us after Friday prayers," a resident of Tripoli told Al Jazeera. "They were hunting us down and firing at any moving objects. They were intentionally killing people."
During a surprise appearance Friday evening in Green Square, Gadhafi threatened to "burn all of Libya" during a last stand that would include rivers of "red." "When needed, all the weapons stores will be opened," he said.
One U.S.-based Libyan keeping in frequent touch with friends and colleagues in Tripoli told AOL News that a very well-known doctor told him that five major hospitals in the city stood eerily empty.
"They've changed their strategy in an ominous way," Madghis Madi, a coordinator of the 17th of February Revolution, told AOL News. "They have more and more checkpoints all over the city. And they're not wearing military clothes and they're using civilian cars so nobody can tell who they are," the longtime anti-Gadhafi activist said. "It's like they are sleeper agents."
A school graduate in Tripoli told The Associated Press that in recent days, he had seen many people killed by snipers. "People are panicked, they are terrified. Few leave their houses. When it gets dark, you can't walk in the streets because anybody who walks is subject to be shot to death," he said.
He said Gadhafi's use of force against protesters turned him against the regime. "We Libyans cannot hear that there were other Libyans killed and remain silent," he said. "Now everything he says is a lie."
Madi said some of the most disturbing information he heard came from a prominent doctor -- identified only as Dr. Omar -- in Tripoli, who reported that the five major hospitals were empty.
"It's very spooky and very worrying," Madi said. "Either they are deterring people from coming there or people are too scared to go there. Usually the hospitals are filled to overflowing."
"His family decided they wanted to bury him last night, even though Muslims don't bury their dead at night," Massin said. "So they took him to the cemetery. While they were trying to bury him, a militia came by and shot at them. Eight people died."
Outside the capital, rebels are thought to control about half of Libya's 1,000-mile Mediterranean coastline, where most of the population lives, the AP reported. They even captured a brigadier general and a soldier Saturday as the Libyan army tried to retake an air base east of Tripoli.
Members of Gadhafi's inner circle have been defecting at a rapid rate. The latest to go is Gadhafi's constant companion, the nurse WikiLeaks described as a "voluptuous blonde."
Galyna Kolotnytska called her family in Kiev on Friday to tell them she intends to return to Ukraine, her daughter told the Segodnya newspaper.