Benghazi: Muammar Gaddafi is welcome to live out his retirement inside Libya as long as he gives up all power, Libya's rebel chief told Reuters on Sunday in the clearest concession the rebels have so far offered.
Gaddafi has fiercely resisted all international calls for him to go and vowed to fight to the end, but members of his inner circle have given indications they are ready to negotiate with the rebels, including on the Libyan leader's future.
Gaddafi is still holding on to power, five months into a rebellion against his 41-year rule and despite a Nato bombardment and an International Criminal Court arrest warrant for crimes against humanity.
"As a peaceful solution, we offered that he can resign and order his soldiers to withdraw from their barracks and positions, and then he can decide either to stay in Libya or abroad," rebel leader Mustafa Abdel Jalil said in an interview.
"If he desires to stay in Libya, we will determine the place and it will be under international supervision. And there will be international supervision of all his movements," said Jalil, who heads the rebels' National Transitional Council.
Speaking to Reuters in his eastern Libyan stronghold of Benghazi, Abdel Jalil, Gaddafi's former justice minister, said he made the proposal about a month ago through the United Nations but had yet to receive any response from Tripoli.
He said one suggestion was that Gaddafi could spend his retirement under guard in a military barracks.
Turkey, which had close economic ties to Gaddafi before the uprising, pledged $200 million in aid for the rebels on Sunday, in addition to a $100 million fund it announced in June.
The rebels say they need more than $3 billion to cover salaries and other needs over the next six months.
"Public demand for reforms should be answered, Gaddafi should go and Libya shouldn't be divided," Turkish Foreign Minister Ahmet Davutoglu said in Benghazi, adding he saw the rebel council as the "legitimate representative" of the people.
Deadlock
The conflict in Libya is close to deadlock, with rebels on three fronts unable to make a decisive advance towards the Libyan capital and growing strains inside Nato about the cost of the operation and the lack of a military breakthrough.
Previous attempts to negotiate a peace deal have foundered, but some analysts say Gaddafi's entourage - if perhaps not the Libyan leader himself - may look for a way out as air strikes and sanctions narrow their options.
Gaddafi's daughter Aisha said last week her father would be prepared to cut a deal with the rebels though he would not leave the country, and his son, Saif Al Islam, has said Gaddafi would step down if that is what the people of Libya want.
Libyan Prime Minister Al Baghdadi Ali Al Mahmoudi - part of a hardline camp which has clashed with Saif Al Islam on policy in the past - said the Libyan people did not want Muammar Gaddafi to go.
"I am a Libyan citizen ultimately, and he [Gaddafi] is my leader and he has been our leader for more than 40 years," Al Baghdadi told Al Arabiya television channel when asked if the Libyan leader would step down.
"You see everyone, from small children to old men, all of them love Muammar Gaddafi, they all love him," he said.
Gaddafi last week threatened that Libyans would descend on European countries like "like a swarm of locusts or bees" to exact revenge for the Nato attacks on Libya.
US Secretary of State Hillary Clinton responded by saying instead of making threats he should step down from power.
Libya's Jana news agency said on Sunday Gaddafi had sent a message to German Chancellor Angela Merkel to mark Germany taking over the leadership of the UN Security Council, without giving further details. Germany said it had no knowledge of any such a letter.
Away from the rhetoric, both sides continued to slug it out in a battle which has seen many casualties but, for the past few weeks, only small parcels of land changing hands.
A rebel spokesman in Misrata, about 200km east of Tripoli, said two rebel fighters had been killed on the outskirts of the city, where they are struggling to push back government forces and advance on the capital.
"The [pro-Gaddafi] brigades heavily bombarded Dafniyah and Bourouia last night. Two revolutionaries were martyred and 12 others wounded," the spokesman, who identified himself as Oussama, said from Misrata.
On the front closest to Tripoli, in the Western Mountains region, Nato aircraft dropped leaflets on the government-controlled town of Garyan, warning residents to stay in their homes, said a rebel spokesman called Mohammad.
The alliance last week launched air strikes on the town, which lies on the edge of rebel-held territory.
The rebel spokesman also said there was fighting with heavy weapons on Saturday between rebels and government forces around the village of Ghezaya, in the mountains near the border with Tunisia.
Oil facilities
In Tripoli, a senior source in Gaddafi's government said there was reliable intelligence indicating the rebels were planning to attack oil export terminals in the eastern towns of Brega and Ras Lanuf.
"The Libyan government will do whatever (possible) to prevent such attacks," the source, who did not want to be identified, told Reuters.
"It urges international oil companies as well as international insurance companies to put pressure on their governments to force the rebels, who are supported by Nato, to stop their destructive operations," said the source.
The conflict has already halted oil exports from Libya, helping push up world oil prices to over $110 per barrel. Most oil facilities have escaped major damage in the fighting.
Western governments and the rebels had hoped that African Union leaders would use a summit this weekend to join international calls for Gaddafi to quit.
But they did not do that, and also agreed that the African Union's 53 member states would not execute the international arrest warrant for Gaddafi, according to a document seen by Reuters.
While that may irk the West, it does leave open the possibility that Gaddafi could end the conflict by opting for exile somewhere in Africa.
