Yes, if it can impose a blockade lasting several months, is willing to risk to risk the destruction of Libyan oil, and can eventually deploy UAVs over Libya. But the the worst thing they can do is let the fighting drag on, because it will almost inevitably lead to a humanitarian crisis in Libya.
The major problem facing NATO is that the rebels have been driven too far east to secure the facilities and the pipelines which take the product to the coast (see map below). To avoid permanently splitting the country along some kind of No-Man’s Land, it is not enough for the rebels to stop Khadaffi at the gates of Benghazi; they must drive west far enough to take the infrastructure from the Duck of Death. Only then can Libya be reconstituted as a single political entity.
The major NATO advantage in this campaign is that they control the sea. Khadaffi can be strangled by denying him arms, ammunition, and military supplies, all of which can come in quantity only by sea. But its effects will take months to be decisive. Japan in World War 2 and the Iraqi insurgency showed how far limited supplies can be extended. There is probably still enough explosives in Khadaffi’s arsenals to manufacture millions of IEDs, all of which can be used to slow the rebel advance. They will last even longer if he goes on the defense.
The control of the Med would be largely wasted unless NATO can open the port of Benghazi to allied shipping. But it must be done by rebel forces alone or run afoul of the UN proscription on the use of occupation forces. That may be a term of art which will permit the use of naval troops and marines to in port areas. And the security must extend at least out to artillery range of the port. Antiship missiles may also play a part. Recently the Jerusalem Post reported that a ship smuggling C-802 antiship missiles into Gaza had been intercepted. The shipment weighed only 50 tons. If such weapons reached Khadaffi they might complicate matters.
Khadaffi may try to mine the port or otherwise damage it because the Duck has a further weapon he can employ: humanitarian warfare. As can be seen from the map below, the water supply infrastructure is located to the west, again beyond Benghazi. If Khadaffi can drive, by terror or ethnic cleansing, his opponents into rebel lines, the onus of feeding and watering perhaps millions will fall to NATO. They cannot do this without a port.
Ultimately the rebels will need to be built up by Western training and advice to be capable of the offensive. This would be a good opportunity for the West to essentially “take over” the rebel movement and influence it in pro-NATO directions. But again, it will take a length of time on the order of magnitude of the US rebuilding of Iraqi security forces to develop an acceptable force; that is unless the whole task is subcontracted to Egypt. But Egypt is currently in turmoil so that is questionable.