(CBS/AP)
HEISHA, Libya - Libyan rebels say they're closing in on Muammar Qaddafi 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 Qaddafi'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.
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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 (about $200) advance on their salaries for the three-day Muslim holiday of Eid al-Fitr, which starts Wednesday in Libya.
The international community took another step Tuesday to help Libya's new leaders address those immediate concerns when the United Nations freed up about $1.6 billion in Libyan currency held in Britain.
Britain announced that the Security Council committee monitoring sanctions against Libya had released 1.86 billion in Libyan dinar banknotes. Britain blocked the export of the bank notes, which were manufactured by British currency printer De La Rue, to comply with U.N. sanctions.
Britain said the banknotes, worth about $1.6 billion at the official exchange rates that applied before the start of the conflict, would be securely and rapidly delivered to the Central Bank of Libya.
"This represents another major step forward in getting necessary assistance to the Libyan people, building on the remarkable progress in recent days," British Foreign Secretary William Hague said. "These banknotes ... will help address urgent humanitarian needs, instill confidence in the banking sector, pay salaries of key public sector workers and free up liquidity in the economy."
U.N. Secretary-General Ban Ki-moon, meanwhile, appealed for urgent international support and billions more for the incoming government.
The U.N. chief said he was encouraged by events on the ground and told the Security Council "I think we can now hope for a quick conclusion to the conflict and an end to the suffering of Libya's people."
But at the same time, he warned that the humanitarian situation "demands urgent action," and he called on the U.N.'s most powerful body to continue to respond positively to requests from the opposition National Transitional Council for funds.
Rebel fighters were converging on the heavily militarized town of Sirte, some 250 miles east of Tripoli.
The rebels gave pro-Qaddafi 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.
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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, Qaddafi's chief spokesman, Moussa Ibrahim said the rebels' ultimatum would be rejected.
"No dignified honorable nation would accept an ultimatum from armed gangs," he said. Ibrahim reiterated Qaddafi'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 Qaddafi is seeking refuge in Sirte or one of the other remaining regime strongholds, among them the towns of Bani Walid or Sabha.
"Qaddafi is now fleeing — and we have a good idea where he is," Tarhouni said, without elaborating.
