A spokesman says the opposition insists that the strongman cannot be involved in any future government, but it may allow him to live out his last years in Libya at an isolated location.
Indirect talks on the future of Libya have been taking place between representatives of Muammar Gaddafi's government and rebels based in the eastern city of Benghazi, a spokesman for the opposition said Wednesday.
Mahmoud Shammam of the Transitional National Council said the private mediation efforts, which have yet to bear fruit, have been held in South Africa and France through intermediaries. He said the opposition has held firm that Gaddafi and his family be excluded from any future government, but added it was possible the dictator could live out his last years in Libya at an isolated location.
However Shammam also conceded that no progress had been made and the content of the exchanges "depended on his (Gaddafi) mood".
"We are engaging in discussion with some people who have contact with people from the regime," Mr Shammam, the rebel council's spokesman said at a conference in Beirut. "We are contacting them on the mechanism of the departure of Gaddafi. We don't negotiate the future of Libya."
A four-month uprising against Gaddafi four-decade rule has stricken the oil-rich North African state as Rebels backed by an increasingly controversial NATO-led bombing campaign are now in control of the country's third-largest city, Misrata, while they also control territories in the mountains southwest of the capital, Tripoli, near the country's border with Tunisia.
Mr Shammam also pledged a commitment to a democratic Libya once Gaddafi is ousted and promised that all 32 transitional authority executive committee members, including him, would recuse themselves from political life for four years in any post-Gaddafi government.
The rebel spokesperson said the authority had pledged to uphold civil liberties and the rights of women. He spoke of a democratic flowering in the rebel-controlled east, where he said the number of newspapers had jumped from four to 84. "We believe in civil society," he said.
He downplayed accusations made by Gaddafi and acknowledged by U.S. officials that some members of Al Qaeda may have infiltrated the rebel east. Islamists, including extremist groups such as the Libyan Islamic Fighting Group, which fought alongside Osama bin Laden, would be permitted to take part in politics but only if they abide by democratic ground rules,
"If they deviate from the democratic process, they will suffer the same fate as Gaddafi ", he told an audience at Beirut's Phoenicia Hotel.
In the last few weeks the Nato-led operation has been widely criticised and as the Alliance refused to stop its aerial bombing campaign, officials in the West have become nervous about the legality and mandate of the NATO airstrikes , as the campaign stated purpose is to protect civilians from violence by Gaddafi's security forces. However, as this week, the strikes caused more civilian and rebel deaths, Italy and the Arab League called for the immediate cessation of hostilities.
But Shammam warned that the rebel would continue to fight with or without the Alliance's help: "If NATO leaves, we will fight," he said. "We don't have any other choice."
Diplomats said the South African talks had the tacit approval of President Jacob Zuma, who, since the uprising started, had visited Col Gaddafi in Tripoli twice, under an African Union mandate.
French-led talks led by a former head of the DGSE, external intelligence through a Paris-based think tank, however do not have the government backing.
David Cameron, who with Nicolas Sarkozy, the French president, was the leading international proponent of action against the regime, yesterday claimed that Col Gaddafi was in his last days, having been weakened by air strikes and opposition advances and dismissed suggestions that patience within Nato for continued military operations was running out.
"Time is on our side, time is not on the side of Colonel Gaddafi who's losing his leading military commanders," he said. "The sands of time are running out for him, and so we need to be patient and persistent.
"The alliance taking part in the operations includes some of the richest and most powerful and best equipped nations on the Earth," Mr Cameron said.
"We also have the machinery of Nato, the backing of the United Nations, we have the support of the Arab League, (and) a number of Arab countries are active participants," he added.
However Col Gaddafi threatened retaliation for the first time against the Nato and Arab nations conducting a "crusader's campaign" against his regime.
"What you are doing will rebound against you and against the world with destruction, desolation and terrorism. You are launching a second Crusader war that might extend to Africa, Europe and America," he said in a taped message that was played on Libyan state television. "We will resist and the battle will continue to the beyond, until you're wiped out. But we will not be finished."
"There's no longer any agreement after you killed our children and our grandchildren ... We have our backs to the wall. You (the West) can move back."
In light of Libya's record of waging terrorist attacks on Western targets, including the Lockerbie bombing in 1988 that killed 270 people, the message contained a chilling warning that regime considered its attackers legitimate targets.
"You said, 'We hit our targets with precision', you murderers!" he said. "One day we will respond to you likewise and your homes will be legitimate targets."
The rebels are now ready to be more flexible and say they are willing to grant Gaddafi the right to stay in Libya if he steps down, but by the sound of his last message, the lion of Africa is in no mood to compromise. The rebel's change of strategy comes at a time when they are cash-strapped. They recently visited several international capitals, hoping to gain access to Gaddafi's frozen assets or to win over international financiers to fund the armed rebellion and pay bills. "We have not received a cent from the international community," other than in-kind donations of food and weapons, Shammam complained at a talk organized by the Carnegie Middle East Center, a branch of the Washington-based Carnegie Endowment for International Peace.
Despite Cameron's claim, the conflict, for now, has no end in sight and that might explain the rebel's new stand. As the international community is growing wary of the Nato operation and the rebels, the latter are now insisting they will only be in charge of the transitional phase and will leave once elections are organised and a candidate has been elected. Despite their claim that their main priorities are the respect of human rights and the civil society, they have been attacked by human rights activists for illegally imprisoning civilians and violating basic human rights. The rebels might have for now been recognised as the legitimate representative of the Libyan people by various countries, but they have not been officially elected by the Libyan people, so it is questionable they can even be allowed to put others in jail. They insist the Libyan leader can stay in the country and live in a secret and recluse location, but knowing how Gaddafi's love of the limelight and need for attention, it is unlikely he will accept to retire in those conditions.