Libya's rebel leaders have rejected an attempt by an African Union (AU) delegation to broker a ceasefire, saying they would negotiate only on the condition that Colonel Muammar Gaddafi and his family give up power.
The delegation, which arrived in Benghazi after talks with Colonel Gaddafi in Tripoli, had proposed a ceasefire, a humanitarian corridor for cities and towns besieged by Gaddafi loyalists, and dialogue between the opposition and government.
"The African Union initiative does not include the departure of Gaddafi and his sons from the Libyan political scene, therefore it is outdated," said Mustafa Ahmed Jalil, the head of the Transitional National Council.
Hostile demonstrators outside the Tibesti hotel in the north of Benghazi, where the delegation and the interim Transitional National Council were meeting, waved banners and shouted: "Libya is free and Gaddafi must go."
Dr Fathi Gaith, one of those in the crowd, said: "We are afraid of a compromise that is some sort of trick."
The opposition is quick to suggest that the AU is biased towards Colonel Gaddafi because he has funded politicians and invested in projects across Africa. There is also fear in Benghazi that the peace mission is giving legitimacy to the government in Tripoli and enabling Gaddafi to play for time.
"We can't sleep in the same bed as him," said one demonstrator yesterday. Another added that there was no civil war in Libya, but simply a conflict between the people and a dictator: "We do not need a strongman in this country. We need education."
The South African President Jacob Zuma, head of the AU mission, had said on Sunday after meeting the Libyan leader that Colonel Gaddafi accepted their plan, including the ceasefire proposal, raising brief hopes of a way out of the current stalemate. But on the ground, the guns did not fall silent.
A Nato statement said that regime forces had shelled the western town of Misrata for more than 30 minutes yesterday, "despite the Gaddafi government talking of a ceasefire". Nato secretary-general, Anders Fogh Rasmussen, was also cool on the AU plan, saying that the Gaddafi government had announced many ceasefires in the past, but "did not keep their promises".
US Secretary of State, Hillary Clinton, avoided commenting directly on the peace plans, but emphasised that Washington "have made it very clear that we want to see a ceasefire. We want to see the Libyan regime forces pull back from the areas that they have forcibly entered."
The problem for the opposition is that Gaddafi has shown that he is still a player in Libyan politics. His forces have stood up to Nato air attacks without breaking.
The air strikes have stopped his assault on Benghazi, but the rebel ground forces are still weak and no match for trained government troops without Nato air support. A suggestion yesterday by the National Council leader Mustafa Jalil that the anti-Gaddafi forces might march on Tripoli is wishful thinking.
The opposition's strongest card is European and American political and military support, and many of the banners at yesterday's rally were in English for the benefit of English- speaking television viewers.
There is still a substantial media corps in Benghazi publicising opposition demands but a ceasefire and inconclusive long drawn out negotiations might leave the rebels isolated and unable to count on essential foreign military support.
In practice, Libya has broken in to two halves and this partition might go on for a long time because of the stalemate in the ground fighting. Rebel troops have regained a shaky control of Ajdabiya, the battered and empty town 60 miles south of Benghazi, which is the furthest opposition outpost on the road to the capital.
The stalemate is beginning to look permanent, but people in Benghazi are still nervous of a fresh assault by well-organised pro-Gaddafi troops and some have been sending their families out of the city to safer areas.