US President Barack Obama signed an executive order blocking property and transactions related to the country.

Transactions involving assets of Muammar Gaddafi and some close associates were blocked.

Libya's UN envoy deserted him in dramatic scenes in New York.

On Friday, an anti-government demonstration in the Libyan capital Tripoli came under heavy gunfire. Around 1,000 protesters are thought to have been killed by troops attempting to quell the insurrection.

"The Libyan government's continued violation of human rights, brutalization of its people, and outrageous threats have rightly drawn the strong and broad condemnation of the international community," said Mr Obama in a statement late on Friday.

"These sanctions therefore target the Gaddafi government, while protecting the assets that belong to the people of Libya."