Gaddafi: 'Follow Me Or I Will Burn Libya'
Gary Mitchell, Sky News Online
Embattled dictator Colonel Muammar Gaddafi has threatened to "burn all of Libya" if his people continue to turn against him.
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Col Gaddafi warned in a surprise televised appearance that he was ready to unleash further bloodshed and urged his followers: "Prepare to defend Libya."
"We will defeat any outside attempt to overturn our country," he told loyalists gathered in Tripoli's Green Square.
In his fourth bizarre public tirade this week, Col Gaddafi told supporters to"keep dancing, keep chanting", adding: "Libyan people love me."
Later, his son Saif al-Islam Gaddafi claimed security forces were holding back in battles with rebels - who referred to as "terrorists" - in western Libya and that he hoped there would be a ceasefire in place by Saturday.
It follows days of anti-government protests which have left hundreds - possibly thousands - dead and comes amid a massive evacuation effort and continuing clashes across the oil-rich nation.
The US has shut down its embassy in Tripoli and the White House said it would be introducing sanctions against Libya "in the near future".
Sky's Alex Rossi, In Libya: People 'Frightened' By Speech
The UN's secretary-general Ban Ki-moon has said it is time for the Security Council to take "concrete action" against Libya.
He called on European states to keep borders open for refugees, and on all UN member states to consider sanctions against the country.
A draft UN Security Council resolution warns that the violence in Libya "may amount to crimes against humanity".
Earlier, security forces reportedly opened fire on protesters in Tripoli, killing at least five.
The violence broke out in the Janzour district of the city as demonstrators increased the pressure in Col Gaddafi's stronghold.
Middle East Unrest
The latest wave of bloodshed comes amid battles in key cities, as militiamen working for the ruler attempted to regain control.
Col Gaddafi, who on Thursday gave a rambling state TV address in which he blamed Osama bin Laden for Libya's troubles, is said to be still in control of the capital.
But he appears to be increasingly isolated, with some areas of the city coming under the control of opponents.
"Some areas are under opponents' control - other areas, mainly those around the Bab al-Azizia area (where Gaddafi lives), are under Gaddafi's supporters' and army's control," one resident said.
One way or another, just like Mubarak, he's finished. He just hasn't gone yet. Sky News foreign affairs editor Tim Marshall on Gaddafi
Protesters have reported further gains, having already taken over in Libya's second city Benghazi, and they are said to be in charge of key Libyan oil and product terminals east of the capital.
Residents in Benghazi are reported to have formed a coalition which is building defences against security forces, reassuring foreign oil firms and providing food.
They appeared to rule out splitting the country, saying they wanted a united Libya.
Opponents have seized the eastern oil terminal town of Brega, where soldiers defected to help protesters.
Three towns in the Western Mountains region south-west of Tripoli have also escaped central control, according to reports.
View Libya in Crisis in a larger map
Sky News correspondents in the east of the country have found evidence of weapons including rocket-propelled grenades and sniper rifles being used on protesters.
Some of the worst bloodshed has been in Zawiya, 30 miles west of the capital, where troops opened fire with automatic weapons on a mosque where residents had been holding a sit-in.
The mosque's minaret was blasted with an anti-aircraft gun. A doctor said he saw 10 dead bodies and around 150 wounded but another estimate put the death toll at 23.
Zawiya, a key city close to an oil port and refineries, is the nearest population centre to Tripoli to fall into the hands of the anti-Gaddafi rebellion.
Eyewitness Speaks From Benghazi
Across the country, rebels have celebrated seizing power by showing off the tanks, armoured vehicles and weapons they had taken from security forces.
In the eastern coastal city of Tobruk, tanks lay abandoned after soldiers defected. One told Sky News: "Gaddafi is finished."
Sky News' foreign affairs editor Tim Marshall, reporting from the Libyan border, said it was only a matter of time before Col Gaddafi lost his grip on power.
He said it was possible the 68-year-old's demise may split the country.
Anti-Gaddafi protesters celebrating
The World Food Programme has warned that the Libyan people are facing shortages of food as well as medical supplies.
Facebook groups have continued to call for mass demonstrations in Tripoli, echoing how protests unfolded in Egypt, where President Hosni Mubarak was ousted earlier this month.
Col Gaddafi's crackdown on his own people has been the harshest by far of any leader caught up in the "Arab spring" revolution, which has swept the Middle East in recent weeks.
Human Rights Watch has put the death toll in Libya at nearly 300, but other estimates suggest thousands may have died.
The very soldiers that gunned down their neighbours are being protected from being lynched. Read the blog by Sky's Nick Ludlam, in Libya
Nato has said it will not intervene in the crisis for now, but that it is monitoring the situation closely.
Meanwhile, Switzerland has frozen assets believed to belong to the Gaddafi family, although Libya's foreign ministry has denied it has any such funds.
Unconfirmed reports suggest Britain could also seize around £18bn held in the UK.
Libya's deputy UN ambassador, Ibrahim Dabbashi, who denounced the Libyan leader this week, has said the country would soon stop exporting oil for security reasons but the
industry will not be harmed.
Voxes from Libyan Embassy in London
He warned that thousands would die in Tripoli.
Campaigners outside the Libyan embassy in central London told Sky News that friends and relatives in the country had spoken of "blood on the streets", with many residents afraid to leave their homes.
Col Gaddafi continues to lose people from his inner circle, with his ambassador to Lisbon the latest to defect, denouncing the "tyrannical" regime.
During Col Gaddafi's speech, he vowed to triumph over his enemies and called on people to guard the country and its oil reserves.
He appeared to promise to open weapons arsenals "when necessary" and arm supporters against "the enemy".
The leader, who alternated between blowing kisses and fisting the air during the tirade, said: "Muammar Gaddafi is among you. I stand among the people and we will fight and we will kill them if they want."
It is not clear if the address, aired on state TV, was live or pre-recorded.
Read more on the Libyan crisis:
:: US vows sanctions as world rounds on Libya
:: UK Govt Denies 'Bribing' To Free Britons
:: Find out what Saturday's national newspapers are saying
French president Nicolas Sarkozy
French president Nicolas Sarkozy has stated during a news conference that Libyan leader Muammar al-Gaddafi "must leave," calling the leader to step down. His comments were made during a press conference with the Turkish president Abdullah Gül in . Sarkozy also stated that military action to remove Gaddafi isn't ruled out.

"Our stance is clear. Mr Gaddafi must go. The systematic violence against the Libyan people is unacceptable and will be the subject of investigations and sanctions. Regarding a military intervention ... France would consider any initiative of this type with extreme caution and reserve," said Sarkozy. The United Kingdom is also calling for an arms embargo along with an investigation into war crimes be conducted against Gaddafi.

Sarkozy's call on Gaddafi to step down comes after violence on Friday alone has left at least five people dead in Tripoli, the capitol of Libya, when security personnel fired on demonstrators. At least 500 people are suspected to have been killed in Tripoli with over 2,000 injured. Gunshots were heard in several parts of the city on Friday. Navi Pillay, head of the human rights division of the United Nations says thousands in Libya could have been killed since the uprising began. Human Rights Watch puts the death toll at 300.

"We think this needs to be brought to the International Criminal Court. We also think that people who still cooperate with Gadhafi should be punished," added Sarkozy.

Reports say security forces loyal to Gaddafi have used rocket propelled grenades, snipers, anti aircraft guns and foreign mercenaries to repel protesters. Gaddafi blames Osama bin Laden and people on hallucinogenic drugs for the mass  protests in the country. "(The protesters') ages are 17. They give them pills at night, they put hallucinatory pills in their drinks, their milk, their coffee, their Nescafe," he said on Thursday.

In a speech that aired on Libyan State TV today, Gaddafi said to supporters in Green Square in Tripoli, "We can defeat any aggression if necessary and arm the people. Prepare to defend the nation and defend the oil. We can retaliate against them the opposition. You, the youth, be comfortable... dance, sing, stay up all night."