Turkey cut its diplomatic ties with Muammar Gadhafi's Libyan government and recalled its ambassador, the Turkish Official Gazette reported over the weekend.
The move came after Turkish Foreign Minister Ahmet Davutoglu visited the eastern rebel stronghold of Benghazi on Sunday and pledged $200 million in aid to the rebel Transitional National Council.
In June, after it opened talks with the opposition, Turkey had already pledged $100 million in aid to the rebels' council.
Turkish Foreign Minister Ahmet Davutoğlu, declared the rebel National Council "a legitimate representative of the Libyan people" and said it was time for leader Muammar Gaddafi to leave Libya.
It is not the first time that Turkey, which enjoyed close economic ties with Gaddafi before the rebellion against his rule broke out five months ago, has called on Gaddafi to step down. The Turkish government had previously also called for a ceasefire as it insisted the two sides must reach a political solution.
Last week, Libyan leader Muammar Gadhafi threatened to carry out attacks in Europe against "homes, offices, families," unless NATO halts its campaign of airstrikes against his regime in Libya, a move which has now left him even more ostracised as even his friends will not risk being associated with his threats.
Gaddafi delivered the warning in a telephone message played Friday to thousands of supporters gathered in the main square of the capital Tripoli.
However despite five months of conflict and three months of Nato bombardments, supporters of the leader organised one of the largest pro-government rallies in recent months, signalling that Gaddafi can still muster significant support. A green cloth, several hundred meters long and held aloft by supporters, snaked above the crowd filling Tripoli's Green Square.
A series of powerful explosions later rattled the heart of the capital, apparently new NATO airstrikes, as Gadhafi supporters cheered, honked horns and fired into the air in the street. Black smoke could be seen rising from the area near Gadhafi's Bab al-Aziziya compound.
Still concerned over his safety, Gaddafi spoke from an unknown location and addressing the West, he warned that Libyans might take revenge for NATO bombings.
"These people (the Libyans) are able to one day take this battle ... to Europe, to target your homes, offices, families, which would become legitimate military targets, like you have targeted our homes," he said.
"We can decide to treat you in a similar way," he said of the Europeans. "If we decide to, we are able to move to Europe like locusts, like bees. We advise you to retreat before you are dealt a disaster."
A U.S. State Department spokesman, Mark Toner, said the U.S. would take Gadhafi's threat of attacks seriously, as his regime carried out such actions in the past. Toner said he did not know if there was intelligence to indicate Gadhafi's regime would be able to carry out such attacks.
"This is an individual who's obviously capable of carrying these kinds of threats, that's what makes him so dangerous, but he's also someone who's given to overblown rhetoric," Toner told a news conference in Washington.
Despite the Libyan leader's threats, Nato has continued its efforts to step up its military pressure on Gadhafi's forces in western Libya, and to disrupt attempts to increase their attacks on civilians, the alliance said in a statement.
NATO, which marked 100 days of airstrikes on Libya last week, hit one military facility, three radars, two anti-aircraft guns, one surface-to-air missile launcher, four tanks and one command and control vehicle around Tripoli over the week end.
Its targets also included two tanks, one military storage facility and two armed vehicles in central and western towns.
The uprising to oust Gadhafi, who has been in power for 42 years, began in mid-February as protests turned into an armed conflict after the government's lethal crackdown on demonstrators.