Demonstrators also clamoured for change in Yemen, where President Ali Abdullah Saleh vowed on Sunday to defend his three-decade regime "with every drop of blood," accusing opponents of seeking to split the nation in two.
Police used force to disperse an anti-regime student demonstration in the city of Mukala, wounding five protesters.
Libyan protest leaders established a transitional "national council" on Sunday in cities seized from Kadhafi's grasp, as world leaders called on him to quit and protesters closed in on Tripoli.
The demonstrators shot dead in Oman were killed when police opened fire with rubber bullets as protesters tried to storm a police station. Five others were wounded, an official said.
The protests in Sohar, more than 200 kilometres (125 miles) northwest of Muscat, prompted Sultan Qaboos to introduce swift appeasing measures, including the provision of jobs for 50,000 citizens and unemployment benefits.
State news agency ONA said riots began at dawn on Saturday and continued on Sunday, and that several government and private cars were torched.
Protesters also burned the Sohar governor's house and a police station.
The protesters, who were mostly unemployed, have been demanding jobs, better salaries and measures to curb corruption, the witnesses said.
President Nicolas Sarkozy declared France's support for the revolts by Arab peoples against "dictatorship," and vowed that Paris would do what it can to help them.
But he also warned Europe could face an "uncontrollable" wave of refugees fleeing North Africa if unrest continues, and called on EU leaders to hold a crisis summit to develop a common response.
"We do not know what the consequences of these events will be for migratory flows," he said in a televised address late on Sunday.
Popular uprisings in Tunisia and Egypt last month toppled long-standing presidents Zine El-Abidine Ben Ali and Hosni Mubarak, but protests in Tunisia have persisted because a new government put in place by Ghannouchi, who was Ben Ali's prime minister, also includes others from the old regime.
"This resignation will serve Tunisia, and the revolution and the future of Tunisia," Ghannouchi told reporters. He was replaced by Beji Caid Essebsi, himself a former minister.
Police fired tear gas and warning shots on the capital's central Habib Bourguiba avenue to disperse stone-throwing youths on a third day of violence. Three protesters were killed in clashes with the security forces on Saturday. In response to the growing protests, the interim government had said on Friday that it would hold elections by mid-July.
World attention remains focused mostly on Libya, however.
The chaos engulfing the oil-rich North African state of 6.3 million has fanned fears that Kadhafi's hold on power could descend into civil war as the United Nations said nearly 100,000 people have streamed out of the country.
The UN Security Council imposed a travel and assets ban on Kadhafi's regime and ordered a probe into possible crimes against humanity by the Libyan leader, the first time such a decision has been made unanimously.
In Washington, US Secretary of State Hillary Clinton said the United States was prepared to offer "any kind of assistance" to Libyans seeking to overthrow Kadhafi.
Senior US senators John McCain and Joe Lieberman urged Washington to recognise the transitional government in Libya and provide it with weapons.
Thousands of Bahrainis marched again in Manama calling for the fall of the ruling Sunni dynasty, as 18 opposition MPs resigned in protest at the killing of demonstrators.
Demonstrators continued a vigil in hundreds of tents in Pearl Square -- the epicentre of anti-government protests that began on February 14 -- where they have said they will stay until their demands are met.
On Saturday King Hamad reshuffled his cabinet and Shiite opposition leader Hassan Mashaima returned home from exile.
In Iraq, Prime Minister Nuri al-Maliki warned his cabinet to shape up within 100 days or face "changes," as protest organisers called for a fresh set of rallies and religious leaders demanded reforms.
Sixteen people were killed and more than 130 wounded in a day of protest across at least 16 Iraqi cities on Friday.
In Jordan, Prime Minister Maaruf Bakhit told MPs he was committed to "true and gradual" reforms, a day after the opposition threatened more pressure, accusing the government of not taking the process seriously.
Moroccan authorities said they cut short a music festival in the Western Sahara town of Dakhla after disturbances "exploited by separatists" left 15 people injured.
Around 1,000 people rallied for political reform in Casablanca on Saturday.
More than 100 Saudi academics, activists and businessmen called for major reforms including the establishment of a "constitutional monarchy" in the Gulf kingdom, in a statement posted on the Internet.
Egypt's once widely feared interior minister Habib al-Adly is to appear before a criminal court on March 5 accused of money laundering, judicial sources said.
And Cairo-based Arab League chief Amr Mussa, a former foreign minister of Egypt, said he plans to run for president after the popular uprising that toppled veteran strongman Mubarak.
--------------------------------------------------------------------------