Gaddafi spoke in a telephone call that was piped through loudspeakers to a few thousand people demonstrating in Tripoli's Green Square yesterday, at the end of a day when NATO intensified bombing runs across the capital.
State television carried the Gaddafi's message live, then repeated it a few minutes later.
"NATO will be defeated," he yelled in a hoarse, agitated voice. "They will pull out in defeat."
The sound of automatic weapons being fired defiantly into the air echoed through the square for hours as carloads of pro-Gaddafi supporters many with children in tow crammed the streets leading to the plaza.
Although there was a large presence of police and soldiers in the square, many of those popping off rounds wore civilian clothes.
Protesters and foreign journalists in the capital said it was one of the biggest such demonstrations since airstrikes began.
"Everyone in Libya wants Col Gaddafi, not some traitors," Rajab Hamman, a 51-year-old engineer from Tripoli, said in the square as another demonstrator shot a magazine load of automatic rifle fire into the air a few steps away.
"These are the real, true Libyans," he said of the crowd. Meanwhile, in East of Tripoli, Gaddafi''s forces exchanged intense shelling with rebels who are slowly breaking the government siege on their western stronghold, the port city of Misrata.