Saif al-Islam Kadhafi condemned the unprecedented uprising against his father's 41-year rule as a foreign plot, but admitted mistakes were made in a brutal crackdown and urged citizens to build a "new Libya".

"Libya is at a crossroads. If we do not agree today on reforms, we will not be mourning 84 people, but thousands of deaths, and rivers of blood will run through Libya," he said.

Kadhafi's son gave a lower toll than the United States and rights watchdogs who said that hundreds are feared dead in an offensive to crush the uprising carried out by the military, reportedly backed by foreign mercenaries.

Heavy gunfire broke out in central Tripoli and several city areas Monday for the first time since the anti-regime uprising began in eastern Libya, witnesses and an AFP journalist reported.

Witnesses reported clashes in Tripoli's downtown Green Square between protesters and Kadhafi supporters.

A witness in the working-class Gurgi area said security forces fired tear gas to disperse protesters.

Confusion prevailed in the city after Kadhafi's speech and unconfirmed rumours that his father had left Libya triggered sounds of celebration, with women ululating and drivers hooting their car horns.

According to Human Rights Watch, at least 173 people have died in Libya since the anti-regime protests broke out on February 15 after similar uprisings in Tunisia and Egypt which ended the long rule of two veteran leaders.