Seif al-Islam Gadhafi, in the regime's first comments on the six days of demonstrations, warned the protesters that they risked igniting a civil war in which Libya's oil wealth "will be burned."
The speech followed a fierce crackdown by security forces who fired on thousands of demonstrators and funeral marchers in the eastern city of Benghazi in a bloody cycle of violence that killed 60 people on Sunday alone, according to a doctor in one city hospital. Since the six days of unrest began, more than 200 people have been killed, according to medical officials, human rights groups and exiled dissidents.
Lybia's response has been the harshest of any Arab country that has been wracked by the protests that toppled long-serving leaders in neighboring Tunisia and Egypt. But Gadhafi's son said his father would prevail.
"We are not Tunisia and Egypt," he said. "Moammar Gadhafi, our leader, is leading the battle in Tripoli, and we are with him.
"The armed forces are with him. Tens of thousands are heading here to be with him. We will fight until the last man, the last woman, the last bullet," he said in a rambling and sometimes confused speech of nearly 40 minutes.
Although the elder Gadhafi did not appear, his son has often been put forward as the regime's face of reform.
Western countries have expressed concern at the rising violence against demonstrators in Libya. British Foreign Secretary William Hague said he spoke to Seif al-Islam by phone and told him that the country must embark on "dialogue and implement reforms," the Foreign Office said.
In his speech, the younger Gadhafi conceded the army made some mistakes during the protests because the troops were not trained to deal with demonstrators, but he added that the number of dead had been exaggerated, giving a death toll of 84.
He offered to put forward reforms within days that he described as a "historic national initiative" and said the regime was willing to remove some restrictions and begin discussions for a constitution. He offered to change a number of laws, including those covering the media and the penal code.
Dressed in a dark business suit and tie, Seif al-Islam wagged his finger frequently as he delivered his warnings. He said that if protests continued, Libya would slide back to "colonial" rule. "You will get Americans and European fleets coming your way and they will occupy you.
He threatened to "eradicate the pockets of sedition" and said the army will play a main role in restoring order.
"There has to be a firm stand," he said. "This is not the Tunisian or Egyptian army."
Protesters had seized some military bases, tanks and other weapons, he said, blaming Islamists, the media, thugs, drunks and drug abusers, foreigners - including Egyptians and Tunisians.
He also admitted that the unrest had spread to Tripoli, with people firing in central Green Square before fleeing.
The rebellion by Libyans frustrated with Gadhafi's more than 40 years of authoritarian rule has spread to more than a half-dozen eastern cities - but also to Tripoli, where secret police were heavily deployed on the streets of the city of 2 million.
Armed security forces were seen on rooftops surrounding central Green Square, a witness said by telephone, speaking on condition of anonymity for fear of reprisal. The witness added that a group of about 200 lawyers and judges were protesting inside a Tripoli courthouse, which was also surrounded by security forces.
An exiled opposition leader in Cairo said hundreds of protesters were near the Bab al-Aziziya military camp where Gadhafi lives on Tripoli's outskirts of Tripoli. Faiz Jibril said his contacts inside Libya were also reporting that hundreds of protesters had gathered in another downtown plaza, Martyrs Square.
In other setbacks for Gadhafi's regime, a major tribe in Libya was reported to have turned against him and Libya's representative to the Arab League said he resigned his post to protest the government's decision to fire on defiant demonstrators in Benghazi, the second-largest city.
Khaled Abu Bakr, a resident of Sabratha, an ancient Roman city to the west, said protesters besieged the local security headquarters, driving out police and setting it on fire. Abu Bakr said residents are in charge, have set up neighborhood committees to secure their city.
The Internet has been largely shut down, residents can no longer make international calls from land lines and journalists cannot work freely, but eyewitness reports trickling out of the country suggested that protesters were fighting back more forcefully against the Middle East's longest-serving leader.
"We are not afraid. We won't turn back," said a teacher who identified herself only as Omneya. She said she was marching at the end of the funeral procession on a highway beside the Mediterranean and heard gunfire from two kilometers (just over a mile) away.
"If we don't continue, this vile man would crush us with his tanks and bulldozers. If we don't, we won't ever be free," she said.
Benghazi is "in a state of war," said Mohamed Abdul-Rahman, a 42-year-old merchant who described how some protesters burned a police headquarters.
Protesters throwing firebombs and stones got on bulldozers and tried to storm a presidential compound from which troops had fired on the marchers, who included those carrying coffins of the dead from Saturday's unrest in the eastern city, a witness said, speaking on condition of anonymity because of fears of reprisal.
The attempt was repulsed by armed forces in the compound, according to the witness and the official JANA news agency, which said a number of attackers and solders were killed.
Later, however, a Benghazi resident said he received a telephone text message that an army battalion that appeared to be sympathetic to the demonstrators and led by a local officer was arriving to take over control of the compound, and urging civilians to get out of the way.
Abdul-Rahman, the local merchant, said he saw the battalion chase the pro-Gadhafi militia out of the compound.
In another key blow to Gadhafi, the Warfla tribe - the largest in Libya, has announced it is joining the protests, said Switzerland-based Libyan exile Fathi al-Warfali. Although it had longstanding animosity toward the Libyan leader, it had been neutral for most of the past two decades.
Gadhafi has been trying to bring his country out of isolation, announcing in 2003 that he was abandoning his program for weapons of mass destruction, renouncing terrorism and compensating victims of the 1986 La Belle disco bombing in Berlin and the 1988 bombing of a Pan Am airliner over Lockerbie, Scotland.
Those decisions opened the door for warmer relations with the West and the lifting of U.N. and U.S. sanctions. But Gadhafi continues to face allegations of human rights violations. Gadhafi has his own vast oil wealth and his response to protesters is less constrained by any alliances with the West than Egypt or Bahrain, both important U.S. allies.
A doctor at one Benghazi hospital where many of the casualties were taken said 60 people were killed Sunday. U.S.-based Human Rights Watch said 173 people died - mostly in Benghazi - in three days of unrest from Thursday through Saturday. A Switzerland-based Libyan activist said 11 people were killed in the city of Beyida on Wednesday. A precise count of the dead has been difficult because of Libya's tight restrictions on reporting.
The Benghazi doctor said his facility is out of supplies to treat the wounded. He spoke on condition of anonymity for fear of reprisal. He said his hospital treats most of the emergency cases in the city.
Susan Rice, the U.S. ambassador to the United Nations, said the Obama administration was "very concerned" about reports that Libyan security forces had fired on peaceful protesters in the eastern city of Benghazi.
"We've condemned that violence," Rice told "Meet the Press" on NBC. "Our view is that in Libya, as throughout the region, peaceful protests need to be respected."
State Department spokesman Philip Crowley said in a statement Sunday that the U.S. has raised strong objections with Foreign Minister Musa Kusa and other Libyan officials about the use of lethal force against demonstrators.
In Cairo, Libya's Arab League representative Abdel-Monem al-Houni said he told the Foreign Ministry in Tripoli that he had "resigned from all his duties and joined the popular revolution."
"As a Libyan citizen, I absolutely cannot be quiet about these crimes," he said, adding that he had renounced all links to the regime because of "my complete devotion to my people."
Al-Houni was part of the group that carried out the coup in 1969 that brought Gadhafi to power. He later fell out with him, but they reconciled in 2000. Gadhafi then named him to the Arab League post.
The Benghazi violence followed the same pattern as the Saturday crackdown, when witnesses said forces loyal to Gadhafi attacked mourners at a funeral for anti-government protesters. They were burying 35 marchers who were slain Friday by government forces.
Sunday's defiant mourners chanted: "The people demand the removal of the regime," which became a mantra for protesters in Egypt and Tunisia.
Hatred of Gadhafi's rule has grown in Benghazi in the past two decades. Anger has focused on the shooting deaths of about 1,200 inmates - most of them political prisoners - during prison riots in 1996.
Libya has the largest proven oil reserves in Africa with 44 billion barrels as of January 2010, according to the U.S. Energy Information Administration, but it's still a relatively small player compared with other OPEC members.
In January, OPEC said Libya produced 1.57 million barrels of oil per day. That puts it behind Saudi Arabia, Iran, Iraq, the United Arab Emirates, Kuwait, Venezuela, Nigeria and Angola.
One major U.S. company that could be affected by unrest in Libya is Los Angeles-based Occidental Petroleum Corp. Occidental says it was the first to resume operations in the country after the U.S. began to lift sanctions in 2004. Last year, Occidental produced 13,000 barrels of oil, gas and liquids per day in Libya.
In other sites of recent unrest, Yemen's embattled president offered Sunday to oversee a dialogue between the ruling party and the opposition to defuse the standoff with protesters demanding his ouster.
The offer by the U.S.-backed Ali Abdullah Saleh - which opposition groups swiftly rejected - came as protests calling for his ouster continued in at least four cities around the country for the 11th straight day. A 17-year-old demonstrator was killed Sunday in the port of Aden when the army opened fire to disperse a march there, bringing the death toll to nine since the protests began.
Associated Press writers Salah Nasrawi in Cairo, Energy Writer Chris Kahn in New York, Douglas Birch in Washington and Slobodan Lekic in Brussels, Belgium, contributed to this report.