New York: US President Barack Obama called on Tuesday for the last of Muammar Gaddafi's forces to lay down their arms as he announced the return of the US ambassador to Tripoli and pledged to help Libya rebuild.
"Today, the Libyan people are writing a new chapter in the life of their nation," Obama said in prepared remarks for a high-level United Nations conference on Libya.
"We will stand with you in your struggle to realise the peace and prosperity that freedom can bring."
The African Union (AU) recognised the National Transitional Council (NTC) as Libya's de facto government, removing another prop of diplomatic support for the ousted Gaddafi.
But a spokesman for Gaddafi said the war may "take years" and that loyalist forces have enough arms and were willing to fight.
Spokesman Moussa Ibrahim also said 17 foreign mercenaries had been captured, including French and British personnel, and were being questioned in the Gaddafi stronghold of Bani Walid.
NTC military spokesman Ahmed Bani has denied the assertion, while French Foreign Minister Alain Juppe said there were "no French mercenaries in Libya". The British foreign office said it had no information about whether the report was true.
Nearly a month after Gaddafi was driven from power with the help of a NATO-led bombing campaign, Obama urged his die-hard supporters to give up.
"Those still holding out must understand -- the old regime is over, and it is time to lay down your arms and join the new Libya," Obama said.
Seeking to bolster Libya's new leaders, he also said the US ambassador was now on his way back to Tripoli and "this week, the American flag that was lowered before our embassy was attacked will be raised again."
Forces hold off attacking Gaddafi bastions
Libyan provisional government forces held off from attacking Gaddafi's last bastions on Tuesday as civilians kept streaming out ahead of more assaults.
There were occasional skirmishes outside Gaddafi's hometown of Sirte, Reuters witnesses said, and doctors at a nearby field hospital said four NTC fighters had been killed by pro-Gaddafi shelling.
NTC fighters said they had captured a tank from pro-Gaddafi forces who may have been trying to flee in it from Sirte.
The tank, draped in sheepskins, stood on the main highway to the south of the Mediterranean coastal city. Fighters climbed on top of it chanting, "God is greatest", waving the NTC flag and firing rifles into the air in celebration.
The front line around the interior desert town of Bani Walid was quiet with no fighting, with NTC soldiers and commanders sitting around in small groups discussing battle plans.
More civilians poured out of both towns, fearing more onslaughts after heavy attacks by NTC forces last week failed on several occasions to dislodge pro-Gaddafi units in the towns.
Anti-Gaddafi commanders outside Sirte said they were giving locals a chance to leave before attacking again.
"Gaddafi and his soldiers do not let them move. They keep them like hostages in the house," NTC fighter Mustafa Abukees told Reuters as he manned a checkpoint outside Sirte checking departing cars for weapons.
"It's a really bad situation. We don't know how many families are inside and we don't know how many are coming out."
Humanitarian groups have voiced alarm at reported conditions in Sirte. "There's no electricity, no phone coverage. Nothing," resident Ibrahim Ramadan said, standing by a car packed with his family at a checkpoint.
Gaddafi defiance
Gaddafi reminded the NTC of his presence on Tuesday in a recorded message carried by Syrian-based Arrai television, in which he said NATO planes would not be able to continue operating in Libya for a prolonged period.
"The political system in Libya is a system based on the power of the people ... and it is impossible that this system be removed," he said. "The bombs of NATO planes will not last."
NATO has hit targets in both Bani Walid and Sirte and also in the more remote town of Sabha, deep in the Sahara desert, where the NTC said it had seized the airport and fort. It was not possible to get independent confirmation.
Sabha, 770 km (480 miles) south of Tripoli and overlooked by an old fort built by Libya's former Italian colonial rulers, straddles the main desert trail south to neighbouring Niger, an escape route already used by members of Gaddafi's entourage.
Any victory around Sabha would be an important boost for NTC forces who have struggled to contain disunity in their ranks and suffered stark reversals on other parts of the battlefield.
Nearly a month after Gaddafi was driven from power, his loyalists in the three towns are still beating back regular NTC assaults.
The first cargo of Libyan crude oil to be pumped since the conflict erupted more than seven months ago has failed to attract buyers because of confusion over quality, traders said on Tuesday.
Libya's Arabian Gulf Oil Company (Agoco) on Tuesday clarified
the oil was a mix of two different crude oils.
At least two traders said they were confused about the quality of the oil and one said weak margins in the European and Mediterranean market did not justify the offer level.
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