Muammar Gaddafi on Thursday slammed reports he had fled to neighbouring Niger as ‘psychological warfare and lies’ and vowed to vanquish the NATO forces who he said were running out of steam.

As pockets of fighting continued around the country, Libya's new leadership and the United States called on neighbouring countries to close their borders to members of the Gaddafi regime.

However, in his first address for several days the ex-leader remained defiant, telling his countrymen: "They have nothing else to resort to apart from psychological warfare and lies."

Speaking on the Damascus-based Arrai Oruba television channel, he added: "They last said Gaddafi had been seen in a convoy heading towards Niger.

"They want to weaken our morale. Do not waste time on this weak and ignoble enemy."

Gaddafi also said NATO ‘will be defeated’ as its ‘logistical capacities will not allow it’ to press on with its military intervention.

"We are ready in Tripoli and everywhere to intensify attacks against the rats, the mercenaries, who are a pack of dogs," he said.

Since his Tripoli complex was overrun on August 23, Gaddafi has made several appeals for resistance in tapes aired by Arrai, which is run by Iraqi Sunni former MP Mishan al-Juburi.

Juburi, the only person able to contact Gaddafi since he went into hiding after forces of the National Transitional Council (NTC) took Tripoli, said the ex-leader and his son Seif al-Islam were still in Libya.

"I can tell you that I spoke with Gaddafi very recently," Juburi told the media.

"He is in Libya, in very good spirits, feels strong, is not afraid, and would be happy to die fighting against the occupiers," Juburi said by phone.

"His son Seif al-Islam is in the same state of mind," added Juburi, whose channel has broadcast a number of audio messages from the Gaddafis.

The NTC fears Gaddafi will try to slip over one of Libya's borders and Niger was forced to deny he was in the country after a convoy carrying other senior ousted regime officials fled there on Monday.

The US said Gaddafi was not believed to be among them.

As the hunt for Gaddafi intensifies, the new leadership has sought Niger's help in preventing him, his family or his troops from crossing the border, while Washington also urged other nations to deny refuge to any wanted Libyans.

Bidding to cut off Gaddafi’s potential escape routes, the NTC said it had dispatched a team to the Niger capital Niamey and the United States said Gaddafi aides who entered Niger were being detained.

"Our understanding is that the convoy included some military and senior officials under Gaddafi's former regime," State Department spokeswoman Victoria Nuland said.

"They are now being held in the capital... and they are being monitored closely by Nigerian officials."

Also, Washington "is in contact with Mali, Mauritania, Chad and Burkina Faso to emphasise the importance of respecting the UN Security Council resolutions and of securing their borders", Nuland said.

New regime forces, meanwhile, were poised to battle loyalist troops still holding out in the strongholds of Bani Walid, southeast of Tripoli, Sabha in the deep south and the coastal city of Sirte, Gaddafi's hometown.

In preparation for a transfer to government once the final holdouts have fallen, National Transitional Council (NTC) number two Mahmud Jibril arrived in Tripoli, acting deputy information minister Khaled Najm said.

But an NTC spokesman in Benghazi said the new authorities would not complete their move to the traditional capital until Libya was ‘fully liberated’.

"We still have work to do here" in Benghazi, said Fathi Baja, head of the NTC's political affairs committee.

Libya's new rulers are anxious to arrest Gaddafi and put him on trial, sealing their hold on the country.

His remaining forces have been given a Saturday deadline to surrender, in a bid to spare further bloodshed.

At Bani Walid, 170 kilometres (105 miles) southeast of Tripoli, negotiators were still seeking to broker the oasis town's peaceful surrender.

NTC leaders say they are committed to avoiding bloodshed in the town, despite a delegation sent there on Tuesday having to retreat after being fired upon.

In the hamlet of Wishtata, 40 kilometres from the front, Colonel Abdullah Abu Asara said his volunteer fighters were ready for anything.

"We are fully ready to attack, we are just waiting for the command from the National Transitional Council, we are under their command now," he told the media.

NTC forces on Wednesday advanced along the road from Um Khunfis to the Red Valley, the pro-Kadhafi forces' frontline, 60 kilometres east of Sirte, where an AFP journalist reported artillery fire.

NATO, in its latest operational update on Wednesday, said its warplanes had bombed six tanks, six armoured fighting vehicles, four armed vehicles, a munitions store and an artillery piece in Sirte the previous day.

But in a sign of the struggle the new government will have in rebuilding the country's economy the International Energy Agency said the key oil exports are unlikely to return to their pre-war level before 2013.

"Our experts think that 2013 or beyond will most probably show the complete full restoration of the Libyan supply to the market, but not before that," Maria van der Hoeven told the media.

Libya produced about 1.6 million barrels per day before the rebellion against Gaddafi broke out in mid-February.