The leaders of Libya's uprising say they are considering a conditional offer from Muammar Gaddafi to step down, sources have told Al Jazeera.
Libyan state television on Tuesday denied reports that the Libyan leader tried to strike a deal with opposition forces seeking his removal. An official from the Libyan foreign ministry described the reports as "absolute nonsense".
However, a spokesman for the opposition National Council in the eastern rebel stronghold of Benghazi confirmed that a representative had sought to negotiate Gaddafi's exit.
Gaddafi was reported to have sent a representative to Benghazi on Sunday night to discuss a conditional plan to step down, Al Jazeera learned. The offer was provided on the condition that Gaddafi would be able to keep his assets and avoid prosecution.
The Libyan leader is said to be willing to step down in return for dropping war crimes charges against him and guaranteeing a safe exit for him and his family. He also reportedly wants guarantees from the UN that he will be allowed to keep his money.
Abdel Jalil Mustapha, the head of the opposition National Council, rejected the idea until Gaddafi actually leaves but said the council "may" consider a deal after his exit.
"We rejected this (deal). We are not negotiating with someone who spilled Libyan blood and continues to do so. Why would we trust the guy today?" Mustafa Gheriani, a media officer for the council said.
Appeal for dialogue
On Monday evening, a leading member of the government appealed to rebel leaders for dialogue, another sign that Gaddafi may be ready to compromise with opponents challenging his rule.
Jadallah Azous Al-Talhi, a Libyan prime minister in the 1980s, appeared on state television on Monday reading an address to elders in Benghazi, asking them to "give a chance to national dialogue to resolve this crisis, to help stop the bloodshed, and not give a chance to foreigners to come and capture our country again".
The appeal did not detail any concessions that Gaddafi's administration would be prepared to make. The rebels said they will settle for nothing less than an end to Gaddafi's four decades in power.
The fact that Al-Talhi's appeal was broadcast on tightly-controlled state television indicated that it was officially endorsed.
Until now Gaddafi and his entourage have shown little public appetite for dialogue, describing the rebels as armed youths under the influence of drugs who have been manipulated by al-Qaeda and foreign powers.
Tripoli last week appointed an envoy to take humanitarian aid to Benghazi but it was not clear if the envoy had a mandate to negotiate with the rebels.
Strengthening military positions
Security forces loyal to Gaddafi have strengthened their military position in the last few days, squeezing rebel-held towns in the west and checking the advance of rebel militias westwards towards the capital, Tripoli.
There has also been fierce fighting in the eastern city of Misurata, located between Tripoli and Gaddafi's hometown Sirte, with reports of at least 18 people killed.
Families residing in Ras Lanuf began heading eastward in an apparent attempt to flee the fighting in that strategic port town, our correspondent there said. Several people were reported to have been killed in battles a day earlier, including a family trying to flee the fighting.
Gaddafi supporters moved eastward on Tuesday in an effort to push the rebels back and recapture fallen towns, with reports emerging that they have taken the central Libyan town of Bin Jawad.
Valerie Amos, UN under-secretary-general for humanitarian affairs and emergency relief co-ordinator, said in a statement that the Benghazi Red Crescent reported that Misurata was also under attack by government forces again.
"Humanitarian organisations need urgent access now,'' she said. "People are injured and dying and need help immediately."
Witnesses also told Al Jazeera that Az-Zawiyah, west of Tripoli, was under heavy attack by government forces.
For now, the Gaddafi government has managed to halt the rebel advance that began last week when fighters ventured beyond the opposition-controlled eastern half of the country.
Rebels plead for help
The rebel forces say they will be outgunned if the government continues to unleash its air attacks on them and are pleading for the international community to impose a no-fly zone to prevent this.
"We don't want a foreign military intervention, but we do want a no-fly zone," rebel fighter Ali Suleiman told AP.
"We are all waiting for one,'' he said. The rebels can take on "the rockets and the tanks, but not Gaddafi's air force''.
The US president said on Monday that the US and its NATO allies were still considering a military response to the violence even as Britain and France were drafting a UN resolution that would establish a no-fly zone.
Barack Obama said the US will stand with the Libyan people as they face "unacceptable'' violence. He also sent a strong message to Gaddafi, saying he and his supporters will be held responsible for the violence there.
William Hague, the UK foreign minister, said Britain is "working closely with partners on a contingency basis on elements of a resolution on a no-fly zone".
However, a British diplomat at the UN clarified that the draft resolution is being prepared in case it is needed but no decision has been made to introduce it at the Security Council.
The six US-allied Gulf Arab nations on Monday said they back a UN-enforced no-fly zone over Libya to protect civilians. The Gulf states also condemned the killings by pro-government forces in Libya as "massacres".
Arab foreign ministers are to hold crisis talks on Friday to discuss imposing a no-fly zone over Libya, Arab League
Hundreds if not thousands of people have died since Libya's uprising began on February 14 in an effort to end Gaddafi's more than 41-year rule, although tight restrictions on media make it near impossible to get an accurate number.
The number of people who have fled the violence in Libya since last month has passed 215,000 according to the International Organisation for Migration, most of them foreign workers. The exodus is creating a humanitarian crisis across the border with Tunisia.
The UN refugee agency warned on Tuesday that there was a critical shortage of long haul flights to evacuate foreign migrants who have fled Libya to their home countries in Asia and Africa.