It asked the United Nations to "shoulder its responsibility ... to impose a no-fly zone over the movement of Libyan military planes and to create safe zones in the places vulnerable to airstrikes."
The Arab League suspended Libya's membership on Feb. 22.
The U.S. and the European Union had deferred to the 22-member league of Arab nations to determine whether outside military forces should intervene with many leaders expressing reservations about the usefulness of imposing no-fly zone while escalating their involvement in another conflict in the region.
The U.N. Security Council will consider the move and examine the intricacies of enforcing a no-fly zone as permanent members China and Russia are thought to oppose the proposal.
One proposal would team up forces from the North Atlantic Treaty Organization to shoot down any airplanes flying over Libyan airspace, the Associated Press reported.
President Obama has called for Gadhafi to step down and has issued sanctions against Libya. Despite pressure from some U.S. senators to intervene in Libya, however, Obama has hesitated on whether to take military action. Britain and France have pushed for intervention.
Former President Bill Clinton supports a no-fly zone over Libya to give rebels a chance against the powerful air force of Libyan leader Muammar Gadhafi.
Meanwhile, Gadhafi was swiftly advancing on the insurgents, pushing the front lines further into rebel territory.
Gen. Abdel-Fattah Younis told the Associated Press that Gadhafi's forces were about 50 miles past the oil port of Ras Lanouf and about 25 miles outside Brega, the site of a major oil terminal.