French planes fired the first shots in what is the biggest international military intervention in the Arab world since the 2003 invasion of Iraq, destroying tanks and armoured vehicles in the region of the rebels' eastern stronghold, Benghazi.
Hours later, US and British warships and submarines launched 110 Tomahawk missiles against air defences around the capital Tripoli and the western city of Misrata, which has been besieged by Gaddafi's forces, US military officials said.
They said US forces and planes were working with the UK, France, Canada and Italy in operation "Odyssey Dawn".
Gaddafi called it "colonial, crusader" aggression.
"It is now necessary to open the stores and arm all the masses with all types of weapons to defend the independence, unity and honour of Libya," he said in an audio message broadcast on state television hours after the strikes began.
State television said the "crusader enemy" hit civilian areas of Tripoli and fuel storage tanks that supplied Misrata.
Residents in Misrata said air strikes had targeted a military airbase where Gaddafi loyalists were based.
Several Tripoli residents said they heard an explosion near the eastern Tajoura district. "I heard an explosion. I saw a flash, it was a very strong explosion," said one.
In Benghazi, where earlier on Saturday rebels said they had beaten back an advance by Gaddafi's troops, residents welcomed the military intervention but were also apprehensive.
"We think this will end Gaddafi's rule. Libyans will never forget France's stand with them. If it weren't for them, then Benghazi would have been overrun tonight," said Iyad Ali, 37.
"We salute, France, Britain, the United States and the Arab countries for standing with Libya. But we think Gaddafi will take out his anger on civilians. So the West has to hit him hard," said Khalid al-Ghurfaly, a civil servant, 38.
'All necessary means'
Earlier on Saturday, leaders meeting in Paris (see 'Background') announced the start of military intervention after Gaddafi's troops pushed into the outskirts of Benghazi in spite of a UN resolution passed on Thursday calling for an end to attacks on civilians.
"Those taking part agreed to put in place all necessary means, especially military, to enforce the decisions of the United Nations Security Council," French President Nicolas Sarkozy said after the meeting of Western and Arab leaders.
"Colonel Gaddafi has made this happen," UK Prime Minister David Cameron told reporters after the meeting. "We cannot allow the slaughter of civilians to continue."
Some analysts have questioned the strategy for the military intervention, fearing Western forces might be sucked into a long civil war despite a US insistence - repeated on Saturday - that it has no plans to send ground troops into Libya.
Canadian Prime Minister Stephen Harper suggested that outside powers hoped their intervention would be enough to turn the tide against Gaddafi and allow Libyans to force him out.
"It is our belief that if Mr. Gaddafi loses the capacity to enforce his will through vastly superior armed forces, he simply will not be able to sustain his grip on the country."
A US military slide showed some 25 coalition ships, including three US submarines armed with Tomahawk missiles, are stationed in the Mediterranean.
The Libyan government has blamed rebels, who it says belong to al Qaeda, for breaking a cease-fire it announced on Friday.
In Tripoli, several thousand people gathered at the Bab al-Aziziyah palace, Gaddafi's compound that was bombed by US warplanes in 1986, to show their support.
"There are 5,000 tribesmen that are preparing to come here to fight with our leader. They better not try to attack our country," said farmer Mahmoud el-Mansouri.
"We will open up Libya's deserts and allow Africans to flood to Europe to blow themselves up as suicide bombers."
US says not leading intervention
France and Britain have taken a lead role in pushing for international intervention in Libya and the United States - after embarking on wars in Afghanistan and Iraq - has been at pains to stress it is supporting, not leading, the operation.
In announcing the missile strikes, which came eight years to the day after the 2003 US-led invasion of Iraq, Obama said the effort was intended to protect the Libyan people.
"Today I authorised the armed forces of the United States to begin a limited action in Libya in support of an international effort to protect Libyan civilians," Obama told reporters in Brasilia, where he had begun a five-day tour of Latin America.
He said US troops were acting in support of allies, who would lead the enforcement of a no-fly zone to stop Gaddafi's attacks on rebels. "As I said yesterday, we will not, I repeat, we will not deploy any US troops on the ground," Obama said.
But despite Washington's determination to stress the limits of its role, Vice Admiral Bill Gortney, director of the US military's Joint Staff, said the missile strikes were only the first phase of multiphase military action.
Many analysts do not think Western powers would be satisfied with a de facto partition which left the rebels in control in the east and Gaddafi running a rump state in the west.
One participant at the Paris meeting said that Clinton and others had stressed Libya should not be split in two.
And Obama on Friday specifically called on Gaddafi's forces to pull back from the western cities of Zawiyah and Misrata as well from the east.
But security analysts have questioned what western powers will do if Gaddafi digs in.
"It's going to be far less straightforward if Gaddafi starts to move troops into the cities which is what he has been trying to do for the past 24 hours," said Marko Papic at the STRATFOR global intelligence group.
"Once he does that it becomes a little bit more of an urban combat environment and at that point it's going to be difficult to use air power from 15,000 feet to neutralise that."
Thousands flee Benghazi
Earlier on Saturday hundreds of cars full of refugees fled Benghazi towards the Egyptian border after the city came under a bombardment overnight. One family of 13 women from a grandmother to small children, rested at a roadside hotel.
"I'm here because when the bombing started last night my children were vomiting from fear," said one of them, a doctor. "All I want to do is get my family to a safe place and then get back to Benghazi to help. My husband is still there."
Those who remained set up make-shift barricades with furniture, benches, road signs and even a barbecue in one case at intervals along main streets. Each barricade was manned by half a dozen rebels, but only about half of those were armed.
In the besieged western city of Misrata, residents said government forces shelled the rebel town again early on Saturday, while water supplies had been cut off for a third day.
"I am telling you, we are scared and we are alone," a Misrata resident, called Saadoun, told Reuters by telephone.
Al Jazeera television reported on Saturday that Libya's rebel military council was coordinating with the international coalition that had launched air strikes against areas where Muammar Gaddafi's forces were present.
It also said Western forces had bombarded a military college near the west Libyan city of Misrata where it said Gaddafi's forces were based.
(EurActiv with Reuters.)