The spokesman for Moammar Gaddafi’s collapsing government on Wednesday rejected a rebel ultimatum to surrender or face an all-out military assault, and two of Gaddafi’s sons sent mixed signals from hiding about dealing with the rebel government.

A senior rebel official coordinating the hunt for Gaddafi, Hisham Buhagiar, said the deposed Libyan leader is believed to be either in the area of Bani Walid, a desert stronghold of Gaddafi loyalists 104 miles southeast of Tripoli, or in Sirte, his home town and tribal power base on the Mediterranean coast 278 miles east of the capital, Reuters news agency reported. Both areas were hit Tuesday by NATO airstrikes, and rebels say they are closing in on Sirte from the east and west.

Libya’s Transitional National Council — the de facto government of the country since the rebels gained control of key areas last week and Gaddafi disappeared from view — has said loyalists have until Saturday to relinquish control over the pockets of the country where they still hold sway.

In response, Gaddafi spokesman Moussa Ibrahim dismissed the council as an unlawful group and said Gaddafi’s son Saadi was willing to negotiate and form a transitional government in coordination with the rebels — something opposition leaders have made clear is unacceptable to them.

“No dignified, honorable nation would accept an ultimatum from armed gangs,” Ibrahim said in a phone interview with the Associated Press.

A rebel commander, Abdel Hakim Belhaj, gave a different account of Saadi Gaddafi’s role, saying the son is trying to negotiate the terms of his surrender. Belhaj said Saadi first called him Tuesday, asked whether his safety could be guaranteed and was told he would be treated humanely, AP reported.

According to al-Arabiya television, Saadi Gaddafi said he contacted Belhaj with authorization from his father in an effort to end the fighting in Libya. “We were talking about negotiations based on ending bloodshed,” he said. He added that the Gaddafi loyalists recognize the rebel council as “a legal party” but insist that “we are also the government and a legal negotiating party.”

Separately, a man claiming to be Saif al-Islam Gaddafi, another son of the longtime leader, vowed that he would fight to the death and that nobody would surrender. In the audio statement broadcast on the al-Rai television station, the man said he was speaking from the Tripoli suburbs and insisted that his father is fine, AP reported.

As the search for Gaddafi and his sons continued, rebels said Wednesday they arrested Gaddafi’s foreign minister, Abdul Ati al-Obeidi, at his farm just west of Tripoli.

In a call to AP headquarters in New York, Ibrahim, the Gaddafi spokesman, said Gaddafi was still in Libya and had no plans to leave. He said NATO was launching missile strikes in Sirte, likely because rebels have told them Gaddafi is in the city. Ibrahim, who said he was speaking from somewhere south of the capital, said missile attacks from warplanes circling over Sirte have killed 1,000 people and left many others injured. The claim could not be independently confirmed, however, and Gaddafi’s regime has seriously exaggerated casualty numbers during the six-month civil war.

“Maybe they have been advised by some of the leaders of the rebels to attack the city with such vigor and power in hope that the leader is there praying with his people,” Ibrahim said.

Fearing a bloody battle for Sirte, refugees streamed out of the city Wednesday, passing rebel checkpoints in vehicles packed with belongings, Reuters reported. Loyalist troops remained dug in around the city of about 100,000 people.

NATO said Wednesday that its planes carried out 38 strike sorties the day before, hitting a Gaddafi command-and-control facility, tanks, “armed vehicles” and other targets in the vicinity of Sirte. It said airstrikes also were carried out Tuesday in the area of Bani Walid. NATO said its planes hit an ammunition depot there, as well as surface-to-surface missile launchers and a storage facility for tanks and multiple rocket launchers.

The opposition currently controls Tripoli and much of the rest of the country, but the center of Libya remains firmly in the hands of Gaddafi loyalists, effectively dividing it between east and west.

As rebels try to restore basic services such as water and fuel in the areas they hold, Sirte is seen as the most important pro-Gaddafi holdout. Forces loyal to Gaddafi have reportedly sought refuge in Sirte, as well as in Sabha, a desert town 482 miles south of the capital.

“If we want to unify the whole country and if we want to declare that the war is over, we have to free Sirte,” Mustafa Sagazly, deputy interior minister of the transitional council, said Monday. “Otherwise, we’ll be in a continuous state of war.”

Correspondent Simon Denyer in Tripoli contributed to this report.