Muammar Gaddafi urged his supporters from hiding to fight on as Libya's new interim rulers met world leaders to discuss reshaping a nation torn by 42 years of one-man rule and six months of civil war.
Gaddafi said in a message relayed by satellite TV "Let it be a long battle. We will fight from place to place, from town to town, from valley to valley, from mountain to mountain."
He said "If Libya goes up in flames, who will be able to govern it? Let it burn."
In further comments broadcast later, he vowed to prevent oil exports, in the kind of threat that stirs fears of an Iraq-style insurgency: "You will not be able to pump oil for the sake of your own people. We will not allow this to happen," Gaddafi said. "Be ready for a war of gangs and urban warfare."
Amid conflicting reports of where the 69-year-old fugitive might be, a commander in the forces of the new ruling council said he had fled to a desert town south of the capital, one of several tribal bastions still holding out.
Seeking to avoid more bloodshed, opposition forces also extended by a week a deadline for Gaddafi's hometown of Sirte, on the coast, to surrender.
World leaders meet
World leaders agreed to free up billions more in frozen assets to help Libya's interim rulers restore vital services and start rebuilding after a six-month war that ended a 42-year dictatorship.
In their first address to the world since rebel forces overran Tripoli last week and drove out Muammar Gaddafi, Libya's interim leaders thanked Western powers for backing their revolt and urged Libyans to ensure a peaceful transition.
France, Britain and other powers, sitting down for talks with the National Transitional Council (NTC) vowed to keep up their military backing as long as needed but said the focus was now on reconstruction.
French President Nicolas Sarkozy told a news conference. "We have committed to unblock funds from the Libya of the past to finance the development of the Libya of the future,"
He said a total of $15bn (€10.5bn) would now be freed up from Libyan assets frozen under sanctions. The figure included $3bn (€2.1bn) the UN Sanctions Committee has approved for release in the United States and Britain and €1.5bn in France.
It also includes €2.6bn of assets in Italy, a billion in Germany and €700m in the Netherlands.
Interim Libyan council Chairman Mustafa Abdel Jalil told delegations from about 60 countries and international bodies that Libya would not let them down.
British Prime Minister David Cameron has said that the international community, which will hold another meeting on Libya in New York later in September, trusted the NTC and would stand by it. "We cannot afford a failed pariah state on Europe's doorstep," he said.
With the West anxious to avoid mistakes made in Iraq, the tight three-hour agenda of the "Friends of Libya" talks focused on political and economic reconstruction, with the heads of NATO, the UN and the European Union also present.
NTC's response to meeting
Abdel Jalil and interim Prime Minister Mahmoud Jibril laid out plans for a new constitution and elections within 18 months.
NTC spokesman Mahmoud Shammam said after the meeting that the members of the interim council did not intend to run for political office for four years.
Russia and China, which opposed the NATO intervention but will also be interested in bidding for contracts in a stable Libya, both sent delegations to the Paris talks.
The NTC has said that those who backed them will be rewarded. French companies have already gone in to assess the situation, but Britain plans no missions until the conflict is over.
