"I announce my resignation from all my duties in response to the revolution of Feb 17 (against Gaddafi)," Yunes, attired in a military uniform, said on the pan-Arabic satellite channel Al-Jazeera.
Gen Yunes, who followed in the steps of Justice Minister Mustapha Abdeljalil, called on the armed forces to join the revolt and respond to the legitimate demands of the people.
Reports said that Youssef Sawani, a senior aide to Saif al-Islam Gaddafi, one of Gaddafi's influential sons, also resigned from his post in protest against the violence.
The resignations came a day after Abdeljalil quit in protest over the "excessive use of violence" against protesters, and diplomats at Libya's mission to the United Nations called on the army to help remove "the tyrant Muammar Gaddafi".
Libyan diplomats in several countries have either resigned in protest over the use of force, including the alleged firing by warplanes on civilian targets, or renounced Gaddafi's leadership, saying they stood with the protesters.
The Libyan Interior Ministry gave the first official death toll since the uprising began a week ago, saying 300 people had died so far -- 189 civilians and 111 soldiers.
As countries across the world started evacuating their nationals trapped in Libya, India and 14 other members of the powerful UN Security Council strongly condemned the use of force against the peaceful protesters and demanded an immediate end to violence in the country.
The Security Council "condemned the violence and use of force against civilians, deplored the repression against peaceful demonstrators and expressed deep regret at the deaths of hundreds of civilians", following a closed-door meeting of the powerful body last night.
A defiant Gaddafi refused to bow down to the massive uprising and vowed to "die a martyr" while exhorting his supporters to crush the anti-regime protests and take back the streets of Libya.
As outrage grew over the bloody suppression of anti-government protests in his country, he cursed the elements he claimed were trying to stir unrest in the Arab world, and raised the spectre of civil war by calling on his supporters to take to the streets.
"Damn those who try to stir unrest in Arab countries," said Gaddafi, who appeared on state television for the second time in 24 hours last night.
"Capture the rats," a fiery Gaddafi said of anti-regime demonstrators.
In Washington, Secretary of State Hillary Clinton expressed outrage over the use of lethal force against peaceful protesters in Libya and asked the Gaddafi government to take steps to end the violence.
"There is no ambivalence; there is no doubt in anyone's mind that the violence must stop and that the government of Libya has a responsibility to respect the universal rights of all of its citizens and to support the exercise of those rights," Clinton told reporters.
William Hague, British Foreign Secretary, said that there are "many indications of the structure of the state collapsing in Libya".
"The resignation of so many ambassadors and diplomats, reports of ministers changing sides within Libya itself, shows the system is in a very serious crisis," he said.
Several European Union countries, mainly Germany and Finland, sought sanctions against Gaddafi at their talks in Brussels.
"We are calling on the Libyan authorities to stop the violence against their own people," German Chancellor Angela Merkel told reporters. "If the violence does not stop ... we will consider sanctions. Moammar Gaddafi's speech was very scary as he has declared war on his own people."
Peru became the first nation to suspend diplomatic ties with Libya.
"Peru is suspending all diplomatic relations with Libya until the violence against the people ceases," its President Alan Garcia said.
Two planes carrying French nationals from Libya arrived in Paris today with some 500 passengers aboard. A Russian plane also brought back 118 people to Moscow from Libya.
The US State Department said it had chartered a ferry to evacuate American citizens from Libya, asking them to reach the designated port in Tripoli as soon as possible.
The 22-member Arab League, meanwhile, barred Libya from attending its meetings until it responds to the demands of anti-regime protesters and guarantees the "security and stability of its people."