The federal government is drawing up plans to evacuate Australians from Libya as it warns the Gaddafi regime may inflict mass casualties to cling to power.

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Prime Minister Julia Gillard said the 105 Australians believed to be in Libya should try to leave the country after the Department of Foreign Affairs and Trade lifted its travel warning to the highest level.

“Our embassy in Cairo – which is accredited to Libya – and our consul-general in Tripoli are making contingency plans for emergency evacuation options,” Ms Gillard told parliament. The UK had offered to help evacuate Australians if necessary, Ms Gillard said.

Ms Gillard’s comments came amid reports the Libyan embassy in Canberra had taken the extraordinary move of severing ties with the Gaddafi regime.

Ambassador Musbah Allafi could not be contacted to confirm the reports.

Libya’s representatives to the United Nations and the Arab League have severed ties with their government in recent days.

Ms Gillard condemned the regime’s violent crackdown on the anti-government protesters who took to the streets one week ago.

Hundreds of protesters seeking an end to Muammar Gaddafi’s four-decade rule are believed to have died in the clashes. “What we have seen is a state take up the weapons of war against its own people,” Ms Gillard told parliament.

“The results – and we have seen them for ourselves on our TV screens – have been bloody and they have been shocking.”

Foreign Minister Kevin Rudd said the Libyan regime’s response was the most brutal seen since a string of popular uprisings began in the Middle East in December.

“We have now entered a danger zone in Tripoli – if the regime uses full force to survive, we may be looking at mass casualties,” Mr Rudd told the National Press Club in Canberra.

Mr Rudd called on the United Nations Security Council to get involved.

“The Libyan regime should be placed on notice by the supreme council of the United Nations that the international community is watching and the international community will act if crimes against humanity are committed,” he said.

UN Secretary-General Ban Ki-moon announced a short time later the security council would meet to discuss the crisis. US Secretary of State Hillary Clinton said the world was watching with alarm.

“Now is the time to stop this unacceptable bloodshed,” she said in a statement. Australian Greens Leader Bob Brown said Gaddafi’s “cruel dictatorship” should be brought to an end.