His release and subsequent hero's return to Tripoli drew a furious response from many, and outrage in the United States has been stoked by the fact that he remains alive almost a year and a half after his release.

According to Abdeljalil, Gaddafi "ordered Megrahi to do it (the bombing)," and had worked hard to secure his release to ensure that his role in the plot remained secret.

"To hide it, he did everything in his power to get Megrahi back from Scotland," the former minister said.

Expressen said its reporter Kassem Hamade, who is currently in Libya, had conducted a 40-minute interview with Abdeljalil at "the local parliament in a large city."

Meanwhile Libya’s deputy foreign minister told E.U. ambassadors in Tripoli al-Qaeda has set up an Islamic emirate in Derna, in eastern Libya, headed by a former U.S. prisoner at Guantanamo Bay,

However, residents in the city have told reporters there is no substance to these rumors, which they claim the Libyan government is sowing to "scare Europe."

"Al-Qaeda has established an emirate in Derna led by Abdelkarim al-Hasadi, a former Guantanamo detainee," Khaled Khaim said.

"They have an FM radio station and have begun to impose the burqa" (head-to-toe covering for women) and have "executed people who refuse to cooperate with them."

Khaim said Hasadi has a lieutenant, "also a member of al-Qaeda and named Kheirallah Baraassi" in al-Baida.

Derna is the capital of a province by the same name in the region of Cyrenaica, some 1,250 kilometers (775 miles) east of Libya's capital Tripoli. Al-Baida lies about 100 kilometers west of Derna.

Earlier, Italian Foreign Minister Francesco Franco Frattini said embattled Libyan leader Gaddafi had lost control of Cyrenaica and shared reports that an Islamic emirate had been declared there.

Speaking at a meeting in Rome organized by the Community of Sant'Egidio, a Christian organisation, Frattini said here had been recent proclamations in Cyrenaica that it was now an Islamic emirate and calls to break with the West.

"It is a worrying development if radical Islam is only a few hundred kilometers away from the European Union's front door, but nothing can justify the violent death of hundreds of innocent civilians," he added.

The deputy foreign minister also said journalists who entered Libya illegally are considered "outlaws" and will be arrested unless they surrender to the authorities.

"There are journalists who entered illegally and we consider them as if they are collaborating with al-Qaeda and as outlaws and we are not responsible for their security," said Khaim.

"They will be arrested unless they surrender to the authorities," he added.

Khaim said Lonly allowed three media crews to enter the country, including correspondents for Al Arabiya.

"We have allowed crews from CNN, Al Arabiya and BBC Arabic to enter Libya," he said.

At least 640 people have been killed in Libya in protests against the regime of Gaddafi since they started last week, the International Federation for Human Rights (IFHR) said on Wednesday.

The figure is more than double the official Libyan government toll of 300 dead, and includes 275 dead in Tripoli and 230 dead in the protest epicenter in the eastern city of Benghazi, the IFHR's Souhayr Belhassen told AFP.

The Benghazi toll includes "130 soldiers who were executed by their officers in Benghazi for refusing to fire on crowds" of protesters, she said.

Belhassen, who heads the Paris-based IFHR, said the toll was based on military sources for Tripoli and on Libyan rights groups assessments in Benghazi and elsewhere.

The Libyan government said on Tuesday that 300 people had died in the protests, including 111 soldiers.

The U.N. Human Rights Council will hold an urgent session on Libya this Friday at the request of Western and Latin American nations, who are pushing for an international investigation into the killings of protesters.

But with a majority of Asian and African nations -- backed by Russia, China and Cuba -- declining to support a draft resolution, diplomats said it was likely to be heavily watered down and perhaps not passed at all at the emergency meeting.

A text tabled at the 47-nation Council condemns "extremely grave" rights violations as forces loyal Gaddafi moved to crush a revolt against his 41-year rule over the past week.

One activist group, U.N. Watch, immediately dismissed the draft for failing to single-out Gaddafi or his security forces directly or demand Libya's expulsion from the Council, to which it was elected by African countries last year.

The only sign of a break in the normally solid bloc of Islamic, African and Asian states which -- with Russian, Chinese and Cuban support -- effectively controls the Council came with Jordan, Qatar, Senegal and the Maldives backing the draft.

But diplomats said this would not be enough to prevent the majority -- who work to shield each other from public criticism on their rights performance -- from blocking any meaningful action by the Council.

Echoing an appeal on Tuesday from U.N. High Commissioner for Human Rights Navi Pillay, the draft would have the Council establish "an independent, impartial and credible U.N.-led international investigation" into rights violations in Libya.

But its wording fell far short of the bluntness of the statement from Pillay, who condemned "the callousness with which the Libyan authorities and their hired guns" were firing on peaceful protesters.

Diplomats said the text was the result of a compromise aimed at winning over some bloc members alarmed at Gaddafi's behavior and perhaps getting it through the Council.

European Union governments agreed on Wednesday to prepare possible sanctions on Libya in response to Muammar Gaddafi's violent crackdown on anti-government protests, EU diplomats said.

Experts will now draw up a list of proposed measures, which could include visa bans, asset freezes, an arms embargo and other restrictions, before EU governments agree when to impose them.