First up: Lest we forget, Gaddafi would like to remind us all that he's living in another universe:

Qaddafi Writes to Obama, Urging End to Airstrikes
By David D. Kirkpatrick and Fareem Fahim, New York Times, April 6/7, 2011

TRIPOLI, Libya — Col. Muammar el-Qaddafi of Libya sent another strikingly personal letter to President Obama on Wednesday.....

“You will always remain our son whatever happened,” Colonel Qaddafi wrote. “We Endeavour and hope that you will gain victory in the new election campaigne. You are a man who has enough courage to annul a wrong and mistaken action,” he added, in idiosyncratic spelling and capitalization.

[.....]

....Qaddafi’s letter, addressed to “Mr. Our dear son, Excellency, Baraka Hussein Abu Oumama,” the Libyan leader reiterated his characterization of the rebels as "Al Qaeda gangs.” He recalled Mr. Obama’s repeated statements “that America is not responsible for the security of other peoples.”,“That America helps only. This is the right logic,” Colonel Qaddafi wrote, adding, “As you know too well democracy and building of civil society cannot be achieved by means of missiles and aircraft, or by backing armed members of Al Qaeda in Benghazi.”.....

The same article also gets into the arguments between the govenment and rebels about who was responsible for cutting off oil production in the southeast, the  battle for Brega, and the meeting of members of the Transitional National Council with an American envoy.

 Then there's what's happening with Misrata:

Changing Libyan Tactics Pose Problems for NATO
By Steven Erlanger, New York Times, April 6, 2011

PARIS — Angry charges by Libyan rebels that NATO has failed to come to their aid point up a question that has haunted the Western air campaign from the start: how to avoid a stalemate and defeat the Libyan leader without putting foreign troops on the ground.

[....]

In the early stages of the air campaign, allied warplanes blistered Qaddafi tanks, artillery and transport trucks in the desert outside the rebel capital, Benghazi. But American intelligence reports from Libya say that the Qaddafi forces are now hiding their troops and weaponry among urban populations and traveling in pickup trucks and S.U.V.’s rather than military vehicles, making them extremely difficult targets.

[....]

NATO officials said on Wednesday that NATO was flying more missions every day, and that defending Misurata was a priority. Carmen Romero, a NATO spokeswoman, said that the alliance flew 137 missions on Monday and 186 on Tuesday, and planned 198 on Wednesday. “We have a clear mandate, and we will do everything to protect the citizens of Misurata.”

A rebel spokesman in Misurata said Wednesday that NATO had delivered two airstrikes that pushed the Qaddafi forces away from the port, opening it for vital supply ships. “We have renewed momentum, and our friends are helping us big time,” said Mohamed, a rebel spokesman whose name was withheld for the protection of his family.

“NATO is not the problem,” the senior NATO official said. “The Qaddafi forces have learned and have adapted. They’re using human shields, so it’s difficult to attack them from the air.” While many Western officials have accused the Qaddafi forces of using human shields, they have yet to produce explicit evidence. But they generally mean that the troops take shelter, with their armor, in civilian areas.

[....]

That is one reason that allied governments, including the United States and Britain, are urging defections from the Qaddafi circle and hoping that he will be removed from inside. No official, of course, is willing to talk about any covert mission to remove the colonel, except to say that “regime change” is not authorized by the United Nations.

And that is why Britain, Turkey and the United States are all exploring the possibilities of a negotiated solution to the conflict, provided Colonel Qaddafi and his sons relinquish power

[....]

More on the rebel complaints, NATO responses, the problems of withdrawal of US here:

Libyan Rebels Complain of Deadly Delays Under NATO’s Command
By C.J. Chivers and David D. Kirkpatrick, New York Times, April 4/5, 2011, from Brega

The above also reports, among other things:

In another development on Monday, Italy and Kuwait joined France and Qatar in recognizing the rebels’ coordinating group, the Transitional National Council, as the legitimate government of Libya. “We have decided to recognize the council as the only political, legitimate interlocutor to represent Libya,” said Foreign Minister Franco Frattini of Italy, which plans to send an envoy to Benghazi within days.

And here:

NATO vows to protect Misurata amid criticism
Al Jazeera, 06 Apr 2011

Military alliance says besieged town is now its top priority after rebels accuse bloc of failing to protect civilians.

NATO has vowed to protect Libya's civilian population and give priority to the besieged city of Misurata, a day after rebel fighters accused the military alliance of acting too slowly.

"We have a clear mandate and we will do everything to protect the civilians of Misurata," Carmen Romero, deputy spokeswoman for NATO, said on Wednesday, adding "Misurata is our number one priority".

Oana Lungescu, NATO'S spokesperson, told Al Jazeera that the alliance was enforcing the UN mandate to protect civilians against the threat of attack. "In the last six days we've flown over 1,000 sorties and out of those over 400 were strike sorties......

And here:

Nato lacking strike aircraft for Libya campaign
By Ian Traynor in Brussels and Richard Norton-Taylor, The Guardian, 5 April, 2011:

US withdrawal of attack planes puts pressure on European countries, especially France, to offer more strike capability

Nato is running short of attack aircraft for its bombing campaign against Muammar Gaddafi only days after taking command of the Libyan mission from a coalition led by the US, France and Britain...."We will need more strike capability," a Nato official said.

Since the French launched the first raids on Libya 16 days ago, the coalition and Nato have destroyed around 30% of Gaddafi's military capacity, Lieutenant General Charles Bouchard, the Canadian officer leading the air campaign, told Nato ambassadors....

From The Guardian, I also recommended these:

Libyan rebels should receive training funded by Arab countries, says Britain
By Patrick Wintour, 6 April, 2011

Britain is to urge Arab countries to train the disorganised Libyan rebels, and so strengthen their position on the battlefield before negotiations on a ceasefire, senior British defence sources have indicated.

The sources said they were also looking at hiring private security companies, some of which draw on former SAS members, to aid the rebels. These private soldiers could be paid by Arab countries to train the unstructured rebel army....

Gaddafi forces using civilians as human shields, says France
By Peter Walker and agencies, 6 April, 2011

Libya rebels accuse coalition of standing by as Misrata assault continues, saying air strikes have abated since Nato took charge.

And

Brega hit by Gaddafi forces' shells - dramatic amateur video footage