Muammar Gaddafi has issued an audio message encouraging Libyans to take up arms against the fighters battling his loyalists and accusing the National Transitional Council (NTC), currently running the country, of being a front for Western powers.
The message from the deposed Libyan leader was broadcast early on Thursday on Syria-based Al-Rai TV.
"To all my beloved Libyans, the Libyan land is yours and you need to defend it against all those traitors, the dogs, those that have been in Libya and are trying to take over the land," Gaddafi said.
"They were spies for the Italians and now they are spies for France. All those germs and rats ... capture all those who are working with NATO and the UK to bomb our country and kill Libyans and our children."
Gaddafi also dismissed reports that he had fled to neighbouring Niger as "psychological warfare and lies".
He said there was nothing unusual about a convoy of cars going to Niger.
"How many times do convoys transporting smugglers, traders and people cross the border every day for Sudan, Chad, Mali and Algeria," Gaddafi said. "As if this was the first time a convoy was headed towards Niger."
The president of Burkina Faso has also deined that Gaddafi is in his country.
"We don't have any information on the presence of Libyans on our territory since these events started," he said.
On the ground, Libyan fighters claimed on Wednesday to have got Gaddafi surrounded within a 60km radius.
Anis Sharif, a spokesman for Tripoli's new military council, however, would not say where exactly Gaddafi had been found.
Sharif said Gaddafi had been tracked using high technology and human intelligence. "He can't get out," he said.
Gaddafi, who was removed from power in August after an uprising against his rule, is believed to be travelling in a convoy of about 10 cars and may be using a tent as shelter, Hisham Buhagiar, who is co-ordinating the NTC efforts to find the former Libyan leader, said.
"It is the tent. We know that he does not want to stay in a house, so he stays in a tent. People say the cars came, and then they made a tent," Buhagiar said, adding that his sources had not seen Gaddafi themselves.
Meanwhile, the anti-Gaddafi forces are still working to gain full control of the country almost three weeks after the fall of the capital, Tripoli.
Fighters have been engaged in prolonged negotiations to convince representatives from Bani Walid, about 150km southeast of Tripoli, that there would be no retributions if the town surrendered peacefully.
But the representatives, upon returning to the town to deliver the message, were fired at and forced to retreat to NTC territory on Tuesday.
On Thursday, the NTC sent an additional battalion of rebel fighters to Bani Walid, where it is preparing for a showdown with Gaddafi loyalists.
Thousands of NTC fighters have been camping outside Bani Walid, which is one of Gaddafi's last strongholds.
They have also built a field hospital and deployed 10 volunteer doctors to prepare for the possibility of a fight.
Rockets have been launched from inside the Gaddafi stronghold of Bani Walid and reportedly there were NATO airstrikes.
Al Jazeera's Sue Turton reporting from near Bani Walid on Thursday said that she has been told there were "four NATO airstrikes this morning," although NATO could not confirm this.
According to NTC officials the surrender negotiations inside Ban Walid have stalled and the NTC has given them till Saturday before revolutionary fighters move on the town.
Abdullah Kinshil, NTC's chief negotiator in Bani Walid, said one of Gaddafi's sons, Saif al-Islam, was seen there with supporters on Tuesday.
Al Jazeera's James Bays reporting from Tripoli said: "There are reports of Saif al-Islam's presence in Bani Walid rallying forces against the NTC."
"There are also reports of his brother Saadi's presence in the town. But the information have not been independently verified," he said.
Fighters are also preparing to move towards Gaddafi's hometown of Sirte.
For now, talks have been stalled and they are awaiting orders to take the towns from Gaddafi loyalists.
Amid the Libyan fighters' push to gain full control of this North African country, news came on Tuesday of convoys of Gaddafi loyalists, including his security chief, fleeing across the Sahara into Niger.
The US said it believed the convoy was carrying senior members of Gaddafi's entourage, and urged Niger to detain anyone liable for prosecution for alleged crimes committed during the uprising.
Leon Panetta, the US defence secretary, said Gaddafi was "on the run" but Washington said it had no reason to believe the fugitive leader had left Libya, something his spokesman Moussa Ibrahim confirmed.
"He is in Libya. He is safe, he is very healthy, in high morale," Ibrahim told Reuters by telephone from an undisclosed location.
The convoy included officers from Libya's southern army battalions and pro-Gaddafi Tuareg fighters and is likely to have crossed from Libya into Algeria before entering Niger, sources said.
Abdou Labo, the Niger's minister of internal affairs, however, denied that a Libyan convoy had entered his country. But he confirmed that Niger had given asylum to Gaddafi's internal security chief Abdullah Mansoor on humanitarian grounds.