"The time for compromise has passed," said Abdul Hafiz Ghoga, vice-chairman of the transitional council that has shaped itself into a parallel government in the rebel-held eastern city of Benghazi.
"The people of Libya cannot possibly envisage or accept a future Libya in which Kadhafi`s regime plays any role," he added.
Ghoga`s remarks came hours after a defiant Kadhafi vowed not to quit power in Libya but called for talks to end the conflict, even as his forces pressed their offensive against the key rebel-held port city of Misrata.
In an early-morning speech on state television, the Libyan leader said NATO "must abandon all hope" of his departure," adding that "between Libyans we can solve our problems without being attacked."
The veteran strongman insisted that the rebels battling his forces "are terrorists who are not from Libya, but from Algeria, Egypt, Tunisia and Afghanistan."
The TNC, in turn, says Kadhafi is using foreign mercenaries to fight them.
"Kadhafi`s regime has lost all credibility. It has repeatedly offered ceasefires only to continue violating basic human rights," Ghoga said.