"We need to see this through, and we are in complete agreement that we will," she said, speaking alongside Spanish Foreign Minister Trinidad Jiminez in Madrid.
Clinton also dismissed a threat by Gadhafi to take the war to Europe, made in an audio message broadcast Friday.
"Instead of issuing threats, Gadhafi should put the well-being and the interests of his own people first and he should step down from power and help facilitate a democratic transition that will meet the aspirations of the Libyan people," she said.
Jiminez said Spain and the international community would respond to Gadhafi's threat by remaining united in their efforts in Libya.
"We are working together to protect the Libyan people from the threats and violence that Gadhafi is employing against them," she said. "We will stay until we achieve our goals."
NATO began bombing military targets in Libya after the U.N. Security Council approved a resolution in March authorizing force by whatever means necessary, with the exception of a ground invasion, to protect civilians.
Gadhafi has so far resisted international pressure to step down.
"You are mistaken, you are involved in a battle that you don't know what you are going to face, so withdraw, and run away," he told a pro-government gathering in Tripoli, according to an audio message aired by state TV.
Gadhafi said he " is able in one day to move the battle to the Mediterranean, and able to move the battle to Europe."
He vowed vengeance for the NATO bombings, saying the Libyan military could be "like locusts, like bees" in Europe. Homes and offices could be potential targets, he said.
A State Department spokesman said the United States would take Gadhafi's remarks seriously, but added that the Libyan leader was "given to overblown rhetoric."
Clinton, who is on the last day of a four-day trip to Europe that has also taken in Hungary and Lithuania, held talks with Spanish Prime Minister Jose Luis Rodriguez Zapatero in Madrid and also met with Spain's King Juan Carlos.
She hailed Spain for its contribution to enforcing the no-fly zone over Libya and an arms embargo on the country, describing Spain as "a valued partner and a trusted friend."
Spain has deployed four F-18 fighter jets and a refueling plane to help enforce a no-fly zone, and a frigate, a submarine and a surveillance plane to help impose an arms embargo against the Gadhafi regime.
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