Gaddafi's spokesman Mussa Ibrahim said that everything except the exit of the Libyan leader was negotiable, in first concrete comments from the beleaguered regime whose forces have been hit relentlessly by Western missiles and air strikes for weeks.
"The kind of political system which can be implemented in the country is negotiable. We can talk about it," he told reporters in the capital as rebel forces made a renewed push to recapture the oil town of Brega and the US military withdrew its fighter jets from an international air campaign over the war-torn north African country.
Quoting rebel spokesman, Al-Jazeera said, opposition forces had managed to push into the town seizing half of it.
The control of the oil town is vital to rebel stakes as the capture of the oil pipeline terminus, small refinery and the Mediterranean port could boost the opposition hunt for revenues.
The pan-Arab channel said the rebel forces stormed into the city after US and allied air strikes had hit Gaddafi's defending tank column.
"The rebels are in the streets of new Brega, a largely residential town separated from the city's oil refinery by a stretch of highway," the Al-Jazeera said.
The firm comment by the Libyan government spokesman that Gaddafi would not quit came after opposition rebels flatly rejected a reported peace deal that could have seen the dictators son Seif-ul-Islam taking over.
Terming Gaddafi as the "safety valve", the Libyan spokesman said his stay in power in the country was essential for the unity of nation's tribes and peoples.
"His (Gaddafi) presence is a must to lead Libya to any transition to a democratic and transparent model," Ibrahim said.
Ibrahim also brushed aside allegations that Gaddafi's forces were committing atrocities on civilians.
"We are fighting armed militia and you are not civilian if you take up arms against the state," he said.
The Libyan strongman, after missing for weeks, made his first public appearance Monday when he greeted supporters at his Bab Al-Aziziya residence, the Libyan national TV reported.
Simultaneously, his son Seif, long seen as Gaddafi's successor, gave an interview to BBC in a Tripoli hotel where he said the defected foreign minister Mussa Kussa had not betrayed Gaddafi, but had left the country for health reasons.
Seif said Kussa was being pressurised into making allegations against Gaddafi and Libya in an effort to secure immunity from prosecution, BBC reported.
Gaddafi's son said the Libyan Foreign Minister was allowed to leave the country and denied that Kussa knew incriminating details about the Lockerbie bombings an other details.