President Barack Obama went even further, saying that if the Libyan leader did not stand down the United States would join other nations in launching military action against him.
Libya, meanwhile, said it stopped its military advance on rebel forces and invited monitors to observe the cease-fire.
The United States, Britain and France — backed by unspecified Arab countries — told Gadhafi in a statement late Friday that a cease-fire must begin "immediately," the French presidential palace said.
The statement called on Gadhafi to end his troops' advance toward the eastern city of Benghazi, and pull them out of Misrata, Adjadbiya and Zawiya. It also called for the restoration of water, electricity and gas services in all areas, saying Libya's population must be able to receive humanitarian aid.
"This is not negotiable," the statement said.
Officials announced that the leaders of Britain, France and Germany and the chiefs of the United Nations and Arab League would join other world leaders for an emergency summit on Libya in Paris Saturday.
France's ambassador to the United Nations, Gerard Araud, told BBC Newsnight that he expected military action to begin in Libya within hours of the Paris meeting.
In Tripoli, Libya's deputy foreign minister, Khaled Kaim, invited Germany, China, Turkey and Malta to send observers to monitor the cease-fire, which he said was holding. "The cease-fire for us means no military operations whatsoever, big or small," he told reporters.
British Prime Minister David Cameron, one of the most enthusiastic backers of a no-fly zone, said Britain would send Typhoon and Tornado fighter jets to air bases "in the coming hours" so they would be in position to stop Moammar Gadhafi's forces mounting air strikes against rebels based in the eastern city of Benghazi.
"The clock is ticking and we must be ready to act quickly," Cameron said, adding that Gadhafi must prove he was serious about a cease-fire to avoid military strikes.
The United States has a host of forces and ships in the region, including submarines, destroyers, amphibious assault and landing ships with some 400 Marines, but U.S. officials have not said what role American participation will take.
U.S. Secretary of State Hillary Rodham Clinton said the United States must see "action on the ground," not just words, on a cease-fire.
British defense analyst Charles Heyman said the Americans will have the bulk of the military responsibility.
"It's easy for the British and the French to talk a lot about it when they actually don't have all the right equipment to maintain a no-fly zone on their own," Heyman said.
Britain, France and NATO held emergency meetings Friday on using military force to enforce the no-fly zone, which was approved by U.N. Security Council on Thursday.
French Foreign Minister Alain Juppe said "everything is ready" for action, but added that "we have to analyze the conditions of the cease-fire."
NATO Secretary-General Anders Fogh Rasmussen said NATO was "completing its planning to be ready to take appropriate action in support of the U.N. resolution as part of the broad international effort."
French government spokesman Francois Baroin would not comment on "where, how, what target, or in what form" air strikes against Libyan installations would come.
U.N. Secretary General Ban Ki-moon said "it is imperative that the international community continues to speak with one voice" on Libya.
As well as Britain and France, Denmark and Canada said they would supply fighter jets for the mission. Italy and Spain said they would make their air bases available.
Diplomats have said Arab countries likely to participate in possible strikes include Saudi Arabia, Qatar, the United Arab Emirates and Jordan.
NATO surveillance AWACS planes flying off the Libyan coast are already providing 24-hour coverage of the situation in the air and on the battlefields. Analysts said no-fly zone aircraft would be flying from NATO bases such as in Sigonella, Sicily, Aviano in northern Italy, Istres in southern France, and Ventiseri-Solenzara in Corsica.
The North Atlantic Council, NATO's top decision-making body, decided Friday to speed up planning and will meet again in the next few days when plans are complete, an alliance spokeswoman said, speaking on condition of anonymity because of the delicacy of the situation.
Envoys said there was no discussion at the NATO meeting of any air strikes against targets in Libya.
Even as allies made plans for military intervention, Libya's cease-fire was forcing a reassessment of the situation.
"Along with our colleagues we're looking at the details of that," the EU's high representative for foreign affairs, Catherine Ashton, said of the cease-fire, adding that it was unclear what Libyan Foreign Minister Moussa Koussa's announcements in Tripoli meant in practice.
Chancellor Angela Merkel of Germany — which abstained from the Security Council vote — said the international community would monitor closely to make sure the cease-fire announcement is not a ruse.
"The international community stands together and there are already encouraging reports that Gadhafi is reacting to the resolution," Merkel told reporters in Berlin.
There are also mixed messages about the ultimate ambition of a no-fly zone. Cameron insisted the aim is saving lives, not regime change, but Clinton said the goal remained to get rid of Gadhafi.
Oliver Miles, a former British ambassador to Libya, said getting rid of Gadhafi left "the question of what takes his place."
"What they (the Libyans) lack is any structures — Gadhafi has deliberately destroyed them," he said. "There is no civil society, there are no parties. "
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