Price on Gaddafi's Head as Fighting Goes on

Libya's new masters offered a million-dollar bounty for the fugitive Muammar Gaddafi on Wednesday, after he urged his men to carry on a battle that kept the capital in a state of fear.

A day after rebel forces overran his Tripoli headquarters and trashed the symbols of his 42-year dictatorship, rocket and machinegun fire from pockets of loyalists kept the irregular fighters at bay as they tried to hunt down Gaddafi and his sons.

Western leaders who backed the revolt with NATO air power remained wary of declaring outright victory while the 69-year-old Gaddafi is at large. He issued a rambling but defiant audio message overnight to remaining bastions of his supporters, some of whom may be tempted to mount an Iraq-style insurgency.

But the international powers and the rebel government-in-waiting in the eastern city of Benghazi lost no time in making arrangements for a handover of Libya's substantial foreign assets. Funds will be required to bring relief to war-battered towns and to develop oil reserves that can make Libya rich.

France was working with Britain and other allies to draft a new United Nations resolution intended to ease sanctions and asset freezes imposed on Libya when Gaddafi was in charge. Rebels also spoke of restarting oil export facilities soon.

Washington was about to submit a U.N. resolution to release an immediate $1.5 billion for humanitarian needs.

In Benghazi, the chairman of the National Council gave a sense of urgency to finding Gaddafi, who the rebels believe may still be in or around Tripoli, having left his Bab al-Aziziya compound in the capital before it fell on Tuesday.

Mustafa Abdel Jalil, who was himself one of Gaddafi's ministers before defecting in February, said the incoming administration would offer amnesty to any remaining member of Gaddafi's entourage who killed or captured him.

A local businessman, he added, was offering two million dinars -- or about $1.3 million -- to anyone who caught him.

To any of his inner circle who kill Gaddafi or capture him, society will give amnesty or pardon for any crime he has committed, Abdel Jalil told a news conference in Benghazi.

Abdel Salam Jalloud, a close ally of Gaddafi who switched sides in the past week, told Al Jazeera that the veteran leader had had a plan to drop out of sight before launching a guerrilla campaign once NATO air forces had been called off.

I believe he is in Tripoli, Jalloud said. The rebels must open the roads, after they open the roads, he may dress in women's clothes and leave Tripoli to Algeria's borders or Chad.

He is sick with power, he added. He believes he can gather his supporters and carry out attacks ... He is delusional. He thinks he can return to power.

U.S. officials also believe Gaddafi is still in Libya.

GADDAFI BASTIONS

The rebels, conscious of divisions among the disparate anti-Gaddafi movements which pose a threat to hopes of a stable democracy, have stressed the wish to work with former Gaddafi loyalists and to avoid the purges of the ousted ruling elite which marked Iraq's descent into sectarian anarchy after 2003.

To promote unity, however, removing Gaddafi and his immediate family from any remaining influence is a priority.

One rebel commander in Tripoli said Gaddafi might be in an area in the south of the city where clashes were going on. Rebels in the center of the capital said they had come under rocket and mortar fire from Gaddafi supporters to the south.

Gaddafi's home town of Sirte, on the Mediterranean coast between Tripoli and Benghazi, was still not in the hands of the new leadership. Nor was the southern desert city of Sabha, where the rebels reported fighting. A rebel military spokesman estimated that 95 percent of Libya is under rebel control.

Colonel Abdallah Abu Afra told Al Jazeera: He who governs Libya is he who controls Bab al-Aziziya and that is the reality of the matter. For us, Gaddafi is over.

GADDAFI ADDRESS

In a poor-quality audio broadcast on a satellite channel, Gaddafi said the withdrawal from his headquarters in the heart of the capital was a tactical move after it had been hit by 64 NATO air strikes and he vowed martyrdom or victory .

Urging Libyans to cleanse the streets of traitorous rats, he said he had secretly toured Tripoli: I have been out a bit in Tripoli discreetly, without being seen by people, and ... I did not feel that Tripoli was in danger, he said.

Residents remained fearful, with empty streets, shuttered shops and piles of garbage testifying that life is still far from normal in the city of 2 million. Rebels manned checkpoints along the main thoroughfare into the city from the west. Food, water and medical supplies were running short in places.

On the streets of Tripoli, people were defacing or erasing Gaddafi portraits and other symbols in a city where they were once ubiquitous. They painted over street names and renamed them for rebel fighters who had become martyrs.

One standoff was resolved when guards allowed some three dozen foreign journalists to leave a government-run hotel in Tripoli. They had been prevented from leaving for several days.

The continued shooting suggested the six-month popular insurgency against Gaddafi, a maverick Arab nationalist who defied the West and kept an iron hand on his oil-exporting, country for four decades, has not completely triumphed yet.

A spokesman for Gaddafi said the Libyan leader was ready to resist the rebels for months, or even years.

We will turn Libya into a volcano of lava and fire under the feet of the invaders and their treacherous agents, Moussa Ibrahim said, speaking by telephone to pro-Gaddafi channels.

Rebel leaders would not enjoy peace if they carried out their plans to move to Tripoli from Benghazi, he said.

Gaddafi's family and a small circle of others accumulated great wealth and have most to lose. A woman saying she was his daughter Aisha urged Libyans to fight on in a phone call broadcast on a small satellite channel: I tell the Libyan people to stand hand-in-hand against NATO, she said.

The leader is in the right. It was unclear where she was.

DIPLOMACY

But Gaddafi was already history in the eyes of the rebels and their political leaders planned high-level talks in Qatar on Wednesday with envoys of the United States, Britain, France, Turkey and the United Arab Emirates on the way ahead.

Another meeting was scheduled for Thursday in Istanbul.

China urged a stable transition of power in Libya and said on Wednesday it was in contact with the rebel council, the clearest sign yet that Beijing has effectively shifted recognition to forces poised to defeat Gaddafi.

China respects the choice of the Libyan people, Foreign Ministry spokesman Ma Zhaoxu said in a statement.

A senior representative for reconstruction in the rebel movement said a new government would honor all the oil contracts granted during the Gaddafi era, including those of Chinese companies.

The contracts in the oil fields are absolutely sacrosanct, Ahmed Jehani told Reuters Insider TV.

All lawful contracts will be honored whether they are in the oil and gas complex or in the contracting... We have contracts that were negotiated ... They were auctioned openly ... There's no question of revoking any contract.

A spokesman for rebel-run oil firm AGOCO had warned on Monday Chinese and Russian firms could lose out on oil contracts for failing to back the rebellion.

Russian President Dmitry Medvedev urged Gaddafi and his foes to stop fighting and talk. We want the Libyans to come to an agreement among themselves, he said, suggesting that Moscow could recognize the rebel government if it unites the country.

China and Russia, usually opposed to foreign intervention in sovereign states, did not veto a U.N. Security Council resolution in March that authorized NATO to use air power to protect Libyan civilians. But they criticized the scale of the air campaign and called for a negotiated solution.

The fall of Gaddafi, with the arresting images on Arab satellite TV of rebels stomping through his sanctum and laying waste to the props of his power, could invigorate other revolts in the Arab world, such as in Syria where President Bashar al-Assad has launched bloody military crackdowns on protesters.