The report, released on Tuesday in Brussels, falls on the same day as Libyan leader Muammar al-Qadhafi was due in the Belgian capital.
"Libya is at a crossroads. There is an urgent need to establish the truth over past events and for the Libyan authorities to commit to domestic reforms to address current abuses," Amnesty said.
While noting positive measures such as the freeing of up to 300 prisoners in 2001 and 2002 and a new openness to international monitoring, the group said "a climate of fear" still reigned in the country.
"Today, a pattern of human rights violations, witnessed over the past three decades, repeats itself, often under the new rhetoric of the war against terror."
Meeting with EC
The Libyan leader is set to meet with European Commission President Romano Prodi, Belgian Prime Minister Guy Verhofstadt and European commissioners to discuss issues related to Libya's moves to end its status as an international pariah.
"Libya is at a crossroads. There is an urgent need to establish the truth over past events and for the Libyan authorities to commit to domestic reforms to address current abuses."
Amnesty called on European leaders to send a strong signal to the visiting Libyan strongman to bring his country closer in line with EU standards on human rights.
"It is time to turn promises into action and make human rights a reality," the group said.
"Although abolition of the death penalty is promised, capital punishment remains prescribed and used for a large number of offences including the peaceful exercise of political activities," said Amnesty.
Amnesty's report is based on a February 2004 visit to Libya - the first in 15 years - in which the group was given unprecedented access to authorities and prisoners.
Libya has in the past year tried to end its isolation notably by agreeing to pay-outs to the families of passengers killed in the 1988 bombing of a Pan Am jet over Lockerbie, Scotland and a 1989 attack on a French airliner over Niger.
And in December, Libya announced it would renounce programmes to develop non-conventional and nuclear weapons.
Its actions have earned Libya a lifting of UN economic sanctions and put it back on the path towards international respectability, highlighted by British Prime Minister Tony Blair's handshake with al-Qadhafi during a visit to Tripoli last month.