Russia's special envoy Mikhail Margelov said today that Libya's prime minister told him that Tripoli was holding direct talks with the Benghazi-based rebels in Paris, Russian news agencies reported.

"I was assured at today's negotiations that direct contracts between Benghazi and Tripoli are already underway," ITAR-TASS quoted Margelov as saying after meeting Libyan Prime Minister Al-Baghdadi al-Mahmoudi in Tripoli.

"The Libyan prime minister told me that a round of such contacts concluded yesterday in Paris," he added.

French President Nicolas "Sarkozy has been informed of the outcome of these contacts," Margelov said.

Earlier it was reported that Muammar Gaddafi's regime also told Mr Margelov that the embattled Libyan leader is "not ready" to go, despite growing calls for him to quit and a months-long uprising.

Gaddafi's son Seif al-Islam said elections were the only way to break the stalemate.

Russian news agencies carried the statement made by Margelov, the Africa envoy of President Dmitry Medvedev, after talks in Tripoli with Libyan Foreign Minister Abdelati al-Obeidi.

"I spoke to the foreign minister of Libya, and the minister said that according to him, Gaddafi is not ready to leave," Margelov was quoted as saying.

"In response to a direct question about whether Gaddafi is ready to give up political power after the announcement of a ceasefire or just after its entry into force, the foreign minister told me that (Gaddafi) was not ready" to do so, he added.

Margelov's spokeswoman Varvara Paal told AFP in Moscow the envoy during his one-day visit would meet Prime Minister Baghdadi al-Mahmudi and the foreign minister, but was not scheduled to meet Gaddafi himself.

He reiterated Moscow's call for Gaddafi to go and stressed "nobody wants him dead... he can remain living in Libya in private and security can be ensured by the tribes from which he came."

Margelov, who last week travelled to the Libyan rebel stronghold of Benghazi, has said Russia would be prepared to offer a preliminary "roadmap" for settling the conflict.

Seif al-Islam said elections were the only way out of the deadlock.

"Elections, immediately and with international supervision. It's the only painless way to break out of the impasse in Libya,"Gaddafi 's son told Italian newspaper Corriere della Sera.

"We could hold them within three months. At most by the end of the year. And the guarantee of transparency could be the presence of international observers," he was quoted as saying.

The polls, he added, could be supervised by the European Union or African Union, the United Nations or even NATO as long as a "mechanism" was in place to ensure there were "no suspicions of vote-rigging."

At least five anti-Gaddafi rebels were killed and 30 wounded when they came under sniper fire in three villages they seized on Wednesday in western Libya, hospital sources said Thursday.

The attacks took place in the villages of Zawit Bagoul, Lawania and Ghanymma, the sources said in the western town of Zintan.

The rebels overran the villages as they sought control of a key junction connecting the towns of Yafran and Zintan.

Rebels were seen patrolling the streets of Zawit Bagoul, 20 kilometres (12.5 miles) from Zintan. Pro-Gaddafi positions on the village outskirts were deserted and loyalists left behind clothes, shoes and ammunition.

The correspondent said the rebels later also moved into Lawania, about seven kilometres away, and then Ghanymma, less than 10 kilometres from Yafran, as NATO aircraft were heard overhead.

NATO, which has carried out 10 weeks of air strikes againstGaddafi 's forces, can see out its mission without ground troops, its operations commander said in a briefing.

Lieutenant General Charles Bouchard also said the military situation in western Libya, where there has been an upsurge in fighting, was developing "very positively."

"I do believe we can complete the mission without bringing in ground troops," the Canadian general told reporters. "We are receiving adequate assets to complete the mission and carry out our mandate."

Senior military officials from Britain and France, key players in the NATO campaign, have expressed concerns about how to maintain the NATO operation, which has been extended for a second three-month period from June 27.

NATO warplanes early today destroyed an apparently empty hotel, the Wenzrik, in the centre Tripoli near administrative buildings and Libya's state broadcaster, an AFP journalist reported.

The authorities took a party of reporters to the site of the dawn raid, which left only sections of wall standing. They said the attack caused no casualties.

Libyan Deputy Foreign Minister Khaled Kaaim later denounced what he called a "barbaric and premeditated raid by NATO on civilians."

Kaaim refrained from commenting about Margelov's visit, but when pressed about possible negotiations about Gaddafi's departure, he said that "nobody can make such decisions."

"It is for the Libyan people to decide whether the leader should leave or not," he said.

Italy, Libya's former colonial ruler, said today it will host a reconciliation meeting with 200-300 representatives from the country, including all tribal chiefs.

Foreign Minister Franco Frattini also announced Italy would sign a cooperation agreement with the rebels' National Transitional Council.

Meanwhile, NATO chief Anders Fogh Rasmussen said in a speech to Spain's Senate that the alliance "prevented a massacre" in Libya.

"We have seriously degraded the ability of the Gaddafi regime to attack civilians. We have opened air and sea access for humanitarian assistance. And we have closed it to arms and mercenaries," he said.