Puppet Masters
The Libyan government took journalists to Zawiya on Sunday morning.
But instead of a show of government force, reporters saw opposition fighters manning the barricades in the city centre and flying their flag.
The UN Security Council voted unanimously on Saturday to impose sanctions on Col Gaddafi's regime.
Eastern Libya has fallen to the uprising, which began on 16 February in the wake of revolutions which toppled the long-serving leaders of neighbouring Tunisia and Egypt.
However the Libyan capital Tripoli remains under the control of Col Gaddafi, who is facing the biggest challenge to his 41-year rule.
At least 1,000 people are believed to have been killed in nearly two weeks of violence.
The UN refugee agency (UNHCR) says nearly 100,000 migrants have fled to neighbouring Tunisia and Egypt in the past week.
He was speaking at a news conference in Tunis, after making a lengthy speech defending his record in government.
Mr Ghannouchi is seen as being too close to former President Zine al-Abidine Ben Ali, who was toppled in an uprising last month.
Mr Ghannouchi, 69, had served under Mr Ben Ali since 1989.
"After having taken more than one week of thinking, I became convinced, and my family shared my conviction, and decided to resign. It is not fleeing my responsibilities; I have been shouldering my responsibilities since 14 January [when Mr Ben Ali fled]," he said.
"I am not ready to be the person who takes decisions that would end up causing casualties," he added.
"This resignation will serve Tunisia, and the revolution and the future of Tunisia," he added.
It is exactly what the protesters had been demanding. Mohammed Ghannouchi, had served under the country's old dictatorship, and as far as they were concerned, until he went, their revolution was unfinished.
The question now is whether this resignation will be enough to quell the violence. As the news has spread, people have been taking to the streets, chanting and singing of victory.

Soldiers and dozens of tanks from the Libyan military's elite Khamis Brigade, led by Gadhafi's youngest son Khamis Gadhafi, take positions on Monday about 6 miles outside Zawiya.
Tripoli, Libya - Forces loyal to Libyan leader Moammar Gadhafi were massed near the Tunisian border on Tuesday, residents said, and the United States said it was moving warships and air forces closer to Libya.
Residents feared pro-Gadhafi forces were preparing an attack to regain control of Nalut, about 60 km (38 miles) from the Tunisian border in western Libya, from protesters seeking an end to Gadhafi's rule.
On Monday, foreign powers talked openly of imposing a "no-fly" zone or making other military moves against leader Gadhafi, as his forces used tanks and fighter jets to strike at rebel-held cities nearest the capital.
The U.S. said all options were open, including the use of warplanes to patrol the North African nation's skies and protect citizens threatened by their leader.
Pentagon and military officials told NBC News it appears "unlikely now" that the U.S. military will have to intervene, but "prudent moves" were being taken just in case.

Mugshot of Sirhan Bishara Sirhan taken after his arrest for assassinating Robert F. Kennedy in 1968
More than four decades after Sen. Robert F. Kennedy was assassinated, his convicted murderer wants to go free for a crime he says he can't remember.
It is not old age or some memory-snatching disease that has erased an act Sirhan Bishara Sirhan once said he committed "with 20 years of malice aforethought." It's been this way almost from the beginning. Hypnotists and psychologists, lawyers and investigators have tried to jog his memory with no useful result.
Now a new lawyer is on the case and he says his efforts have also failed.
"There is no doubt he does not remember the critical events," said William F. Pepper, the attorney who will argue for Sirhan's parole Wednesday. "He is not feigning it. It's not an act. He does not remember it."
The application for a $500 scholarship from the Former Majority Association for Equality looks pretty much like all the others out there. Well, except for this eligibility requirement: "Male - No less than 25% Caucasian."
Yes, the Texas-based nonprofit organization has launched a scholarship for white men. Members of the group, which goes by FMAFE, say they aren't racist and "have no hidden agenda to promote racial bigotry or segregation," according to their Web site. Instead, they say their goal is to provide financial aid to white men who might not qualify for other scholarships.
But it wasn't teachers, fire fighters, policemen, and college students that caused the economic recession that has devastated government budgets - it was Wall Street. And as middle class workers are being asked to sacrifice, the rich continue to rig the system, dodging taxes and avoiding paying their fair share.
In an interview with In These Times, Carl Gibson, the founder of US Uncut, which is organizing some of today's UK-inspired massive demonstrations against tax dodgers, explains that while ordinary Americans are being asked to sacrifice, major corporations continue to use the rigged tax code to avoid paying any federal taxes at all. As he says, if you have "one dollar" in your wallet, you're paying more than the "combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America":
It seems unusual, but it's exactly what the staff of Foreign Policy has done to Seymour Hersh, following a lecture the venerated reporter gave at Georgetown University's campus in Doha, Qatar. You may know Hersh as the dogged investigator who exposed the My Lai Massacre during Vietnam. You may know him as the staff writer for the New Yorker who published some of the earliest pieces on Abu Ghraib in May 2004. You might even know him as the man derided and then vindicated for claiming that Dick Cheney was running a secret assassination squad right out of the vice president's office. (In truth, the squad was and is a bipartisan affair, initiated under Clinton and still operative under Obama.)
Yet, given the Foreign Policy staff's derisive commentary on Seymour's Jan. 17 talk, you would think he was some credulous rube midway through his first Dan Brown novel.
Behind the rhetoric about democracy and humanitarian concerns, Washington and the European powers are seeking to exploit the brutality of Gaddafi to condition public opinion to accept a colonial-style intervention and the reassertion of imperialist control over the country's oil fields.
Over the weekend, Gaddafi's hold on power was further eroded by the defection of additional political and military figures and the capture of more key cities by the opposition. Most significant was the fall to the rebels of Zawiyah, an oil port and refinery city thirty miles to the west of the capital, Tripoli. The capture of Zawiyah signified the spread of the rebellion, heretofore centered in the east of the country, to the west.
"In my opinion, any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should 'have his head examined,' as General MacArthur so delicately put it," Mr. Gates told an assembly of Army cadets here.
That reality, he said, meant that the Army would have to reshape its budget, since potential conflicts in places like Asia or the Persian Gulf were more likely to be fought with air and sea power, rather than with conventional ground forces.
The last pope formed a cult of Padre Pio, the present one reveres the Curé of Ars. Both were mentally disturbed self-tormentors, sleeping on stone, living the lives of Poor Tom in King Lear. Popes have also been in steady denial about the male body's reliable production of sperm. Sedulously creating a tradition of priestly child molestation, the modern Vatican seems to be inhabited by mad male spinsters.