A regional head of security has been removed from his post following clashes with protesters in the Libyan town of al-Bayda on Wednesday which left several people dead, local media say.
The move came as anti-government activists called for a "day of anger" via social networking sites.
Libyan leader Muammar Gaddafi's supporters gathered in Tripoli.
There are unconfirmed reports of clashes in the second city Benghazi, and in Zentan, southwest of Tripoli.
Pro-democracy protests have recently swept through several Arab nations, with the presidents of Tunisia and Egypt forced to resign amid growing unrest.
But this week's demonstrations were the first display of defiance in Libya, where dissent is rarely tolerated.
'The revolution continues!'
Mr Gaddafi's supporters gathered in Green Square in the centre of the capital Tripoli.
The demonstrators shouted: "We are defending Gaddafi and the revolution!" and "The revolution continues!" Others hurled insults at foreign media.
Correspondents say all streets leading to the square are gridlocked, and there is non-stop coverage of the rally on state media.
But the situation is unclear elsewhere in the country, with reports of clashes in several cities.
The unrest in Zentan left a number of government buildings including a police station on fire.
Opposition websites said violence in Benghazi left at least six people dead, with four killed in al-Bayda on Wednesday.
The semi-independent newspaper Quryna, which is subject to Libyan censorship laws, has confirmed just two deaths, in al-Bayda.
"Today the Libyans broke the barrier of fear, it is a new dawn," exiled opposition leader Faiz Jibril was quoted as saying by the Associated Press news agency.
The New York-based organisation Human Rights Watch said 14 people were arrested on the eve of the planned demonstrations.
Opposition newspaper Libya al-Yawm showed the police station in al-Bayda on fire.
There are a number of unconfirmed reports of the government opening fire on the protesters on Wednesday.
Reports on social networks talk of government forces possibly firing from helicopters on to the crowds. Other sources said snipers were used.
Protests in Benghazi were reportedly begun after the arrest of Fathi Terbil, who represents relatives of more than 1,000 prisoners allegedly massacred by security forces in Tripoli's Abu Salim jail in 1996. He was later said to have been freed.
More than 100 members of a banned Islamist militant group were freed from Abu Salim on Wednesday. It is not clear if the Benghazi clashes and the release of the inmates were connected.
Col Gaddafi is the Arab world's longest-serving leader, having ruled oil-rich Libya since a coup in 1969.
He has always insisted that the country is run by a series of people's committees, though most outside observers believe it is a police state with him firmly in control, the BBC's Jon Leyne reports.
The Middle East has recently seen a wave of protests fuelled by discontent over unemployment, rising living costs, corruption and autocratic leaderships.
This began with the overthrow of Tunisia's leader, Zine al-Abidine Ben Ali, in January. Last week, President Hosni Mubarak of Egypt resigned.
In recent days there have also been anti-government demonstrations in Yemen, Bahrain, and Iran.