Liberia's week-old ceasefire was close to collapse on Wednesday after reports of heavy fighting between rebel forces and troops loyal to President Charles Taylor around Monrovia, the capital.

Aid agencies urged the warring parties to reinstate the truce and warned of serious humanitarian problems as thousands fled the centre of the capital to seek refuge in the embassy of the US, with which Liberia has close historical links.

The chaos in Monrovia underlines the fragility of the ceasefire in the absence of an outside peacekeeping force, amid calls from many Liberians for the US to help stabilise the country as Brit ish and French troops have done in neighbouring Sierra Leone and Ivory Coast.

"Morally [the US] should consider the past and come to Liberia's aid," said a student. "They can't stand by and watch people dying."

Liberians United for Reconciliation and Democracy (Lurd), the main rebel group, which has been fighting Mr Taylor for more than three years, was reported to be attempting an advance down the main northern access into Monrovia.

Artillery fire lit the sky on Tuesday night as fighting was reported just north of the bridge leading to the city centre over Providence Island, an important symbol of nationhood where a large monument displays inspiring messages such as "Respect Human Dignity".

Thousands of Monrovians carried household items — tattered foam mattresses, plastic coolboxes and cloth-wrapped bundles — on their heads to the US embassy at Mamba Point.

Freed slaves from America founded Liberia in 1847 and instituted a system of autocratic rule by Liberians of American descent that lasted until a bloody military coup in 1980. The US maintained cold war links with the brutal 1980s regime of Samuel Doe.

"We have come for refuge," said Foday, a 53-year-old unemployed man. "We have no place. We want to enter the embassy but it's not open."

John Blaney, US ambassador, on Wednesday said his country was ready to participate in the work of a verification team under the ceasefire arrangement, but only if the fighting stopped and security could be assured. The US mission would remain in Liberia throughout, working to further the peace process, he added.

The Red Cross, which is helping run Monrovia's John F. Kennedy Memorial Medical Center, said an already serious humanitarian problem in the city could become worse if the fighting did not stop.

Dominique Liengme, head of the Red Cross delegation, said the JFK hospital had taken in about 50 casualties, including children and other civilians, hurt during fighting that included rocket-propelled grenade attacks.

The ceasefire was agreed between rebels and Mr Taylor's government at peace talks in Ghana last week, although disagreements quickly emerged over a timetable set for the president to stand down. The truce, brokered by the 15-member Ecowas union of West African states, contained a provision for an international stabilisation force to be sent to Liberia, although the details have yet to be worked out.

Mr Taylor, who is accused of war crimes by a United Nations-backed court examining Sierra Leone's civil war, said on radio that his forces were combating the "Lurd terrorists" but added that the ceasefire must hold.

The president, who denies provoking conflict in other countries, was elected in 1997 after emerging as the leading warlord in a devastating 1989-96 civil conflict.

Lurd and itssplinter group, the Movement for Democracy in Liberia (Model), are reckoned to control as much as two-thirds of Liberia's territory.