Libyan rebels say they're closing in on Gaddafi

Libyan rebels say they're closing in on Muammar Gaddafi and have issued an ultimatum to regime loyalists in the fugitive dictator's hometown of Sirte, his main remaining bastion: surrender this weekend or face an attack.

"We have a good idea where he is," a top rebel leader said on Tuesday.

The rebels, tightening their grip on Libya after a military blitz, also demanded that Algeria return Gadhafi's wife and three of his children who fled there Monday. Granting asylum to his family, including daughter Aisha who gave birth in Algeria on Tuesday, was an "enemy act," said Ahmed al-Darrad, the rebels' interior minister.

Rebel leaders insisted they are slowly restoring order in the war-scarred capital of Tripoli after a week of fighting, including deploying police and collecting garbage. Reporters touring Tripoli still saw chaotic scenes, including desperate motorists stealing fuel from a gas station.

In the capital's Souk al Jumma neighborhood, about 200 people pounded on the doors of a bank, demanding that it open. Civil servants said they were told they would receive a 250-dinar advance on their salaries for the three-day Muslim holiday of Eid al-Fitr, which starts Wednesday in Libya.

Rebel fighters were converging on the heavily militarized town of Sirte, some 250 miles east of Tripoli.

The rebels gave pro-Gaddafi forces there a deadline of Saturday — the day after the end of the Muslim holiday — to complete negotiations and surrender. After that, the rebels will "act decisively and militarily," said Mustafa Abdul-Jalil, the head of the rebels' National Transitional Council.

His deputy, Ali Tarhouni, said in Tripoli that "sometimes to avoid bloodshed you must shed blood, and the faster we do this, the less blood we will shed."

In an overnight phone call to AP headquarters in New York, Gaddafi's chief spokesman, Moussa Ibrahim said the rebels' ultimatium would be rejected.

"No dignified honorable nation would accept an ultimatum from armed gangs," he said. Ibrahim reiterated Gaddafi's offer to send his son Al-Saadi to negotiate with rebels and form a transitional government.

The spokesman also claimed that a Tuesday afternoon missile attack on the regime stronghold of Sirte had killed 1,000 people and left scores more injured during public prayers marking Eid. He said 12 missiles were fired, possibly from airplanes seen circling overhead.

The spokesman said he got the information on a satellite phone call with doctors and security personnel in Sirte.

The alleged attack could not be immediately confirmed. The regime has consistently exaggerated casualty tolls.

There has been speculation that Gaddafi is seeking refuge in Sirte or one of the other remaining regime strongholds, among them the towns of Bani Walid or Sabha.

"Gaddafi is now fleeing — and we have a good idea where he is," Tarhouni said, without elaborating. "We don't have any doubt that we will catch him."

Ibrahim said he thinks that Nato believes Gaddafi is in Sirte "because much of his family and tribe is there."

"Maybe they have been advised by some of the leaders of the rebels to attack the city with such vigor and power in hope that the leader is there praying with his people," he told The Associated Press.

Ibrahim would not disclose Gaddafi's whereabouts except to say that he is "in Libya of course" and not planning to leave the country. Ibrahim said he himself was "somewhere south of Tripoli."

In a dramatic episode, Aisha, a lawyer in her mid-30s, gave birth to her fourth child, a girl, as the family escaped to Algeria.

Algerian news reports said Aisha's pregnancy was one reason for Algeria's controversial decision to take the fleeing family in. Benmehidi said Algeria allowed Gadhafi's family to enter for "humanitarian considerations."