Well, the 22-nation Arab League just asked the UN to impose a no-fly zone on Libya. As The New York Times points out, this open call for western military intervention by Middle Eastern governments is very rare.
So, what's the next step? We'll see. Yes, NATO E-3 AWACS jets have been snooping around Libya for days now and ground troops have been in and out of the country. Still Gadhafi's forces are quickly regaining momentum from the rebels. If NATO or the UN is to authorize a no-fly zone, it needs to happen soon.
Here's interesting post at The DEW Line on the notion of an Arab run no-fly zone.