BRUSSELS, Belgium - An emergency European Union summit on Libya brought a no-fly zone no closer, but leaders embraced a new Libyan opposition group as a viable partner after cutting all contact with strongman Moammar Gadhafi.

The EU said Friday that the option of military action to protect Libyans from attacks by Gadhafi's forces remained, but only if it has sufficient diplomatic backing. The 27 EU leaders were, however, unanimous in saying the fighting could not continue on Europe's southern doorstep.

"If we don't sort out the current problems, the risk is ... a failed pariah state festering on Europe's southern border threatening our security," British Prime Minister David Cameron said.

Government leaders at Friday's summit backed Libya's opposition council, but stopped short of bestowing on it the diplomatic recognition France gave it on Thursday. Some EU leaders were upset President Nicolas Sarkozy had taken that action one day before the meeting, which was meant to decide a common strategy.

"Everyone agrees that Gadhafi is no longer an interlocutor," Sarkozy said Friday. "Everyone agrees that the opposition council is a political interlocutor who we should welcome and encourage."

Gadhafi responded by severing diplomatic ties with France. Deputy Foreign Minister Khaled Qaid told reporters in Tripoli Friday that "Libya decided to suspend its ties with France" but gave no explanation or details.

Four days ago, Libya's Interim Governing Council was a little known umbrella group of Gadhafi opponents based in Benghazi. In a diplomatic coup which started with an appearance at the European Parliament on Tuesday, it was granted official status in France on Thursday and became Europe's foremost opposition partner a day later.

"The proof of the pudding is in the eating, but we consider them as sufficiently reliable at this stage to work with," EU President Herman Van Rompuy said.

He said that even though some of the new council officials had worked with Gadhafi in the past, it was still a brave decision to join the rebels. "Some of them are even risking their lives with that gesture," he said.

The recognition coincided with a call from the EU leaders for Gadhafi to relinquish power. "European leaders were united, categorical and crystal clear: Gadhafi must go," Cameron said.

But Italian premier Silvio Berlusconi said threats to hold Gadhafi to account for his actions had been counterproductive.

"From the moment in which someone launched a proposal to send Gadhafi to the international tribunal, I believe that Gadhafi hardened his resolve to remain in power," Berlusconi told reporters in Brussels. "I don't believe that anyone can change his mind."

Berlusconi said that he has spoken only once with Gadhafi since the unrest began.

Italy, a former colonial power in Libya, enjoys close political and economic ties with the northern African country, and Berlusconi has had close ties with Gadhafi..

During Friday's talks, France and Britain pushed to maintain the military option because of continued fighting in Libya and the threat of more violence by the forces of Gadhafi, who has used at least some European-made weapons to attack his own people. Sarkozy even spoke of targeted military action if Gadhafi used chemical arms.

German Chancellor Angela Merkel remained wary. "On the basis of today I don't see a military intervention," Merkel said. "I'm generally skeptical because you always have to have an end in mind."

She said that once there was a proper legal basis -- which included a mandate from the U.N. Security Council and support from regional organizations like the African Union and the Arab League -- as well as a clear need, military intervention could be an option.

"When all the requirements have been met then we can consider it -- yes or no," Merkel said.

To co-ordinate action with the regional forces, the EU will meet in a summit "soon" with the Arab League and the African Union.

With their backing, and that of the U.N. Security Council, the EU leaders said they want to go as far as needed to remove Gadhafi from power.

"Our objective is the safety of the people, and the safety of the people has to be ensured by all necessary means," EU President Herman van Rompuy said.

Cameron said the EU leaders strengthened financial sanctions and were clear in saying that Gadhafi must go.

But, asked whether the EU had done enough on Friday, Cameron sounded equivocal.

"I think it is progress, but sometimes progress can take some time when you're having 27 conversations around the table," he said.