The Israeli navy seized a boat carrying weapons apparently destined for militant groups in Gaza, a military spokeswoman told AFP on Tuesday.

The vessel, boarded as it sailed southwards some 200 nautical miles off the Israeli coast, was carrying "various weapons," she said, without saying exactly when it was seized.

Libyan leader Moammar Gadhafi said the rebellion against his rule was a "lost cause", in an interview published on Tuesday, adding that he felt "betrayed" by former ally Prime Minister Silvio Berlusconi.

The rebels "have no hope, it's now a lost cause for them," Gadhafi said in an interview with Italian daily Il Giornale, as his forces made major advances on the ground into formerly rebel-held territory in eastern Libya.

Group of Eight powers have failed to agree on military intervention in Libya, France's Foreign Minister Alain Juppe said Tuesday, after the countries discussed proposals for a no-fly zone there.

"For the moment I have not convinced them," Juppe said on Europe 1 radio, referring to his talks with fellow G8 foreign ministers at a dinner on Monday night.

Military intervention in Bahrain by Gulf States is "unacceptable" and it will complicate the already volatile situation there, Iran's foreign ministry spokesman Ramin Mehmanparast said on Tuesday.

"The presence of foreign forces cannot be acceptable and will make the situation more complicated and difficult," Mehmanparast told his weekly press conference broadcast on state television.

Armed forces rolled Monday into Bahrain from Saudi Arabia and the United Arab Emirates to help restore order in the strategic Gulf kingdom where protesters have shut down the financial center.

Thousands of mostly Shiite protesters occupied Manama's business district, turning the regional banking hub into a ghost town as they pressed their calls for democratic change from the Sunni Muslim monarchy.

Iranian Foreign Minister Ali Akbar Salehi on Monday demanded that Bahraini leaders be wise and not use violence in their handling of anti-government protests, the state-run Fars news agency reported.

Salehi said the Bahraini authorities should avoid using "violence and force against the population", adding that Iran expects "the Bahraini government to be wise in responding to the demands of protesters and respecting their rights."

The U.N. Security Council on Monday held talks on Libya, as France said it hoped that Arab League support for a no-fly zone would be a "game-changer" in securing international action.

As he entered the talks, French envoy to the Security Council Gerard Araud said Lebanon -- as the current Arab representative on the Security Council -- would also be working to sway opponents of a no-fly zone, led by China and Russia.

Former Libyan soldiers who defected to the rebels will be pardoned if they surrender to government forces, state television said Monday, quoting the military.

The announcement came as forces loyal to Libyan leader Moammar Gadhafi pursued their eastward drive towards the rebel capital of Benghazi, threatening the key town of Ajdabiya.

The U.S. Embassy said Monday it was "deeply concerned" by Israel's plans to build hundreds of new homes in the West Bank following a deadly attack on a settler family, calling Israeli settlements "illegitimate" and an obstacle to peacemaking.

In a rare interview to the Israeli media, the Palestinian president reached out to the Israeli public, decrying the weekend attack in the settlement of Itamar as "despicable, immoral and inhuman." But he rejected the Israeli suggestion that his government was indirectly to blame.

Young militants who spearheaded Egypt's pro-democracy revolution called Monday for a "no" vote in next weekend's referendum on constitutional reform.

"We have decided on our position, we are saying 'go and vote but say no', said Shadi al-Ghazali Harb, a member of the youth coalition which helped to overthrow president Hosni Mubarak last month.