Million-dollar bounty for Muammar Gaddafi

Libya's new masters offered a million-dollar bounty for the fugitive Muammar Gaddafi yesterday, 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 out Gaddafi and his sons.

Western leaders who backed the revolt with Nato air power remained wary of declaring outright victory while Gaddafi, 69, is at large. He issued a rambling but defiant audio message overnight to remaining 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 UN resolution intended to ease sanctions and asset freezes imposed on Libya when Gaddafi was in charge.

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 one of Gaddafi's ministers before defecting in February, said the new administration would give amnesty to any member of Gaddafi's entourage who killed or captured him. A local businessman was offering two million dinars ($1.3-million) for his capture.

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 or Chad.

"He is sick with power," he added. "He thinks he can disappear in Libya and when Nato leaves, he believes he can gather his supporters and carry out attacks . He is delusional. He thinks he can return to power."

The rebels, conscious of divisions among the 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 chaos after 2003.

To promote unity, removing Gaddafi and his 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 centre 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.

In an audio broadcast on a satellite channel, Gaddafi said the withdrawal from his headquarters 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.

• The Zimbabwe Mail reported that Libya's ambassador to Zimbabwe had led his compatriots in Harare in burning portraits of Gaddafi and replacing the official flag with that of the rebels.