There's no choice but to escalate in Libya

Deploy NATO ground forces as peacekeepers. One of the great risks over the long term is that NATO air forces will eventually get worn out by the constant cat-and-mouse games of the regime’s forces, and at some point, Qaddafi’s troops will catch NATO off guard and be in Benghazi before NATO can stop them. One part of that problem is that the rebel ground forces are not strong enough to repel a regime ground attack without NATO air support. Thus, one solution to that problem would be to deploy a force of peacekeepers on the ground between the rebels and the regime forces to prevent a regime ground attack. European troops, perhaps leavened with Egyptian, Jordanian, Moroccan or other Muslim forces for political appearances, should be more than adequate to play this role. However, since such a deployment is not politically sustainable in perpetuity, it could only be part of a larger strategy—a way to buy time for some other gambit. Since Qaddafi’s past behavior should give us absolutely no confidence that he could be trusted to keep any political agreement he struck, this could only be intended to buy time to…

Arm, train, and organize the Libyan rebels. In Afghanistan in 2001, the United States demonstrated that a reasonably competent rebel army (the Northern Alliance) could smash third world regime forces—even regime forces that had had the upper hand in the past—when backed by determined, Western air power. The Libyan rebels are not close to being the Northern Alliance yet, and it is going to take them months, probably a few years, to get to the point where they are. European trainers could certainly get them there; European military advisers have done well with numerous other third world military forces, including in the Middle East, although American assistance would certainly be very welcome.

Ultimately, arming the rebels and turning them into a more competent force is probably the inevitable option.