Thousands of Libyans keen to hear the new regime's declaration of independence after the dramatic fall and death of ex-leader Muammar Gaddafi have flooded the eastern city of Benghazi today.

"This is the best day of my life," said Mohammed Sharif, 26, an unemployed youth dancing and clapping along with a group of friends in the city centre's Kish Square.

Green, red and black flags -- symbol of the revolution that toppled Gaddafi-- filled the buoyant Mediterranean city where men, women and children gathered to hear interim leader Mustafa Abdel Jalil declare their country's liberation.

"This is a historic day and I am happy that I am here, in my country, on this day," said Sharif who, just a few years earlier, frustrated by oppression and unemployment had considered leaving the country.

"Thank God I did not go," said the young man brimming with enthusiasm and optimism, adding that his country would not let the blood of "all the martyrs" who died for freedom go to waste.

"In a few years, Libya will be one of the brightest states in the Arabic and Islamic word," he said.

Car speakers blasted revolutionary songs and the old national anthem that was used at the time of the monarchy, and which was adopted by anti-Kadhafi forces.

Benghazi, best known as the cradle of the revolt that broke out in February and escalated into civil war, was the initial headquarters of the National Transitional Council (NTC) until August when its fighters, backed by NATO, seized Tripoli.

Fighters hugged each other in front of banners and pictures of the victims killed in the eight-month-long conflict.

Police deployed in large numbers to reinforce security ahead of what promised to be a speech for the history books.

Women flooded the streets to hear Abdel Jalil speak.

"I am very, very happy," Hamida Adam, a paediatrician, carrying a giant flag along with her friends and relatives.

"Moamer Kadhafi is no more. We are free. Libya is free."

The NTC had promised to proclaim the country's liberation after Sirte, Gaddafi's hometown and last bastion of support, fell and the strongman was controversially killed after being captured alive on Thursday.

Reports that he may have been executed have alarmed governments and rights groups but the NTC insists he was shot in the head when he was caught "in crossfire" between his supporters and new regime fighters.

The long-awaited declaration paves the way for the formation of an interim government followed by the first free vote in Libya since Kadhafi seized power in a coup 42 years ago.

Under the NTC's roadmap, an interim government would be formed within one month of the declaration, followed within eight months by elections for a constitutional assembly.

Parliamentary and presidential elections would be held within a year after that.

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