Britain and the United States stepped up pressure on Libyan leader Muammar al-Qaddafi to quit on Tuesday, and rebels fighting him promised to build a free, democratic state if they won power in Tripoli.

British Prime Minister David Cameron, opening a conference of 40 governments and international bodies on Libya, accused Qaddafi's supporters of "murderous attacks" on people in Misrata, Libya's third largest city.

U.S. Secretary of State Hillary Clinton said that coalition military strikes on Libya would continue until Qaddafi fully complied with U.N. demands to cease violence against civilians and pull forces out of occupied cities.

"All of us must continue to increase the pressure on and deepen the isolation of the Qaddafi regime through other means as well," Clinton said.

"This includes a unified front of political and diplomatic pressure that makes clear to Qaddafi that he must go."

The U.S. ambassador to the United Nations, Susan Rice, said on ABC television that Washington had not ruled out arming the rebels, although no such decision had been made yet.

An Italian diplomatic source said any such move would require a new U.N. Security Council resolution backed by a broader international consensus.

On Libya's coastal strip, focus of fighting, Qaddafi's better armed troops appeared to be reversing a recent westward charge by rebels who had taken advantage of coalition air strikes to seize a string of towns over the last week.

Qaddafi accused Western powers of massacres of Libyan civilians in alliance with rebels he said were al Qaeda members.

EXIT PLAN

Before the London conference, called to discuss current action against the Tripoli government and a post-Qaddafi era, the interim rebel National Council held out the prospect of a "modern, free and united state" if Qaddafi could be ousted.

Mahmoud Jebril, a leader of the Benghazi-based National Council, was in London for meetings with Cameron and Clinton.

An eight-point Council statement said the oil-producing north African nation's economy would be used for the benefit of all Libyans. It also said it would draft a national constitution allowing the formation of political parties and trades unions.

Its commitments included guaranteeing "every Libyan citizen, of statutory age, the right to vote in free and fair parliamentary elections and presidential elections, as well as the right to run for office."

The United States said it had apppointed veteran diplomat Chris Stevens as envoy to the interim administration in Benghazi and he would go there soon. France already has a special envoy on the ground liaising with the rebel leadership.

With Qaddafi loyalists pushing back against rebels, Italy has put forward a proposal for a political deal to end Libya's crisis, including a quick ceasefire, exile for Qaddafi and dialogue between rebels and tribal leaders.

"There is a tacit agreement among everybody that the best thing would be for Qaddafi to go into exile, because the reason for continuing the war is the presence of Qaddafi," the Italian source said.

He added that the African Union, which stayed away from Tuesday's meeting to underline its neutrality, was the only body that could persuade Qaddafi to go into exile.

British Foreign Secretary William Hague also implied exile might be a way to take Qaddafi out of the picture and settle the six-week-old uprising against his four-decade rule.

"We want him to leave power and that's what we've consistently said to the Libyan regime. We are not in control, of course, of where he might go," Hague told the BBC, adding he believed Qaddafi should face the International Criminal Court.

Some diplomats and analysts have suggested offering Qaddafi immunity from ICC prosecution and safe passage to a host country could be an incentive for him to go quickly.

Britain and France led the push for a muscular intervention in the Libyan conflict and coalition air strikes have helped rebels in the east of the country to advance; but questions remain about the end game in Libya.

The United States has borne the brunt of military strikes so far but President Barack Obama announced on Monday that it would scale down involvement within days as the NATO defence alliance takes over full command of the operation.

Tuesday's meeting, due to end with a news conference at 1630 GMT, is expected to set up a high-level steering group, including Arab states, to provide political guidance for the international response to Libya.