Gaddafi said defiantly in a televised address to the nation Tuesday that he would not quit despite a countrywide uprising, was ready to die as a martyr in his home country and vowed to quell protests.
He said he would "cleanse Libya house by house" if protesters refused to surrender.
Pascoe told journalists that "the situation... can get much worse" and added that "asking some people to attack other people... is a very dangerous thing".
Gaddafi, who has ruled Libya since 1969, spoke from his residence in the country's capital, Tripoli.
According to international organisations, up to 500 people have been killed and up to 4,000 wounded in clashes with government forces since protests against Gaddafi's regime began Feb 15.
However, Gaddafi denied the use of force against Libyan protesters.
Gaddafi accused "certain forces" of instigating the riots and supplying protesters with money and weapons.