In short, the Libyan regime has both the will and the capability to prevail in this conflict. Whereas Tunisia and Egypt were characterized by the defection of the army from supporting the government to supporting the people, Libya has not seen a similar switch. After an initial round of defections, forces remain loyal to Gaddafi, which seriously limits the chances for any overthrow.
At this point, the US and the international community must make a choice whether to change this calculus, or to stay out of the conflict. And despite conventional wisdom to the contrary, Gaddafi thus far appears to understand this point.
By unleashing a diplomatic offensive, Gaddafi demonstrates that he understands that the response of the international community is a salient factor in his calculus. Also, his airstrikes have been largely directed against oil depots and opposition forces. While continuing danger to civilians exists, Gaddafi has not targeted civilians in such a way so as to force a response from the international community. That is to say, he has come within range of the red line, but has not yet crossed it. This represents strategic thinking on his part.
That Gaddafi is a rational actor is significant. Granted, he may be rational with a very unusual set of preferences. However, if Gaddafi is acting based on a rational set of interests, this is an important factor for policymakers to understand as they prepare any international response to the situation.