African Union Commission chairman Jean Ping addresses an emergency summit of the AU Peace and Security Council in Ethiopia's capital Addis Ababa August 26, 2011. — Photo by Reuters

ADDIS ABABA: The African Union declined Friday to recognise Libya's rebel authority as Muammar Qadhafi's regime is collapsing, and instead called for forming an all-inclusive transitional government.

With rebels still battling diehard forces loyal to Qadhafi, South African President Jacob Zuma said at the end of an AU Peace and Security Council meeting in Addis Ababa that the rebels were not yet legitimate.

“There is a process in Libya wherein the NTC (National Transitional Council) forces are in the process of taking over Tripoli...but there is still that fighting going on.

“So we can't therefore stand and say this is the legitimate one now,” Zuma told reporters.

However, AU Commission spokesman Noureddine Mezni said Libya's seat at the bloc was vacant.

“If a consensual and inclusive government is set up tomorrow and it sends an ambassador to the AU, he will be welcome,” Mezni told AFP.

The pan-African body called on Libyan parties to set up a transitional government that would be welcome by the 54-member organisation.

The AU “encourages the Libyan stakeholders to accelerate the process leading to the formation of an all-inclusive transitional government that would be welcome to occupy a seat in the African Union”, the bloc's Peace and Security Commissioner Ramtane Lamamra told reporters.

In addition, the AU also called for an end to the fighting as well as talks to establish democratic government.

The bloc “strongly reaffirms that the AU stands with the people of Libya and encourages all the parties in Libya to come together and negotiate a peaceful process that would lead to democracy,” Lamamra added.

The AU has repeatedly sought a peaceful settlement to the crisis, but its ceasefire proposals and plans for talks between the rebels and Qadhafi were largely ignored, with the rebels rejecting any negotiations.

Since the start of the rebel onslaught against Qadhafi's 42-year-old regime, several African countries have individually recognised the rebels' NTC, with Ethiopia and Rwanda this week calling on the AU to the same.

Rwanda's Foreign Minister Louise Mushikiwabo said the AU “should offer support to the National Transitional Council,” in remarks to state-run Radio Rwanda Friday.

“We support the National Transitional Council...we think that Colonel Kadhafi has run out of time as a leader,” Mushikiwabo added.

The Libyan rebels have also been recognised by their north African neighbours Egypt, Tunisia and Morocco.

But Algeria on Friday reiterated its “strict neutrality” on the Libyan crisis and declined to recognise the NTC.

“Since the start of the crisis in Libya, Algeria has declared... that it is an internal matter in Libya, which primarily concerns the Libyan people,” foreign ministry spokesman Amar Belani said.

Qadhafi played a key role in the formation of the AU and was a key financier, in addition to funding many African causes. Analysts said that his economic clout partly explained the AU's soft stand on the Libyan leader.

Several Western countries have also recognised the NTC and on Thursday the UN Security Council released $1.5 billion of seized Libyan assets to be used for emergency aid.

Ali Awdian, once Qadhafi's ambassador to Ethiopia before switching support to the NTC, told AFP it was only a matter of time before the AU recognises the rebels.

“We are respecting the rules and procedures of the African Union. It's only a matter of time. It's not a frustration,” said Awdian.

“We know African countries are supporting the people of Libya,” he added.

The NTC announced Friday it would move its leadership from the eastern city of Benghazi to Tripoli, where they still face resistance from pockets of hardline regime loyalists.

Qadhafi's whereabouts however remain unknown despite an intensive search by rebel forces, and on Thursday he broadcast a new audio message calling on the populace to take up arms.

There was speculation Friday that Qadhafi might have found refuge in his hometown of Sirte to the east of Tripoli, near where Nato said it had hit 29 armed vehicles and a “command and control node.”