South African President Jacob Zuma was at the head of a delegation of African leaders who met with Gaddafi in Tripoli on Sunday.
"The brother leader`s delegation has accepted the road map as presented by us," Zuma declared.
"We have to give the ceasefire a chance."
The African Union mission has urged an "immediate end" to fighting, "diligent conveying of humanitarian aid" and "dialogue between the Libyan parties."
A British-based representative of the rebels, Guma al-Gamaty, told the BBC they would look carefully at the AU peace plan, but would not agree to Gaddafi or his sons staying in power.
AU Commissioner for Peace and Security Ramtane Lamamra said Gaddafi`s departure had come up in the talks but gave no further details.
"There was some discussion on this but I cannot report on this. It has to remain confidential," he said. "It`s up to the Libyan people to choose their leaders democratically."
Libyan rebels earlier claimed they had killed three and captured 15 Algerian mercenaries fighting on the side of Gaddafi?s regime near the key eastern town of Ajdabiya.
Algeria has denied reports of involving its mercenaries in the civil war in Libya.
?Algeria is not responsible for those who went to Libya on their own initiative,? Al Jazeera television quoted a spokesman for the Algerian Foreign Ministry as saying on Monday.
NATO air strikes destroyed 25 government tanks on Sunday, while heavy fighting continued in Ajdabiya where government forces have pushed back rebels, Al Jazeera reported. Ajdabiya is the last town before the rebel stronghold of Benghazi, where the AU mission is set to arrive later on Monday.
Government forces were also reported to have shot down two rebel helicopters flying in contravention of the UN-mandated no-fly zone, though this has not been verified.
Rebels in Libya have been fighting forces loyal to longtime ruler Muammar Gaddafi since mid-February. A NATO-led operation is enforcing a no-fly zone over the country in an attempt to prevent Gaddafi loyalists from attacking civilians.