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Interview with Ambassador Aujali; Libyan Rebels Take Most of Tripoli; Aspects of Moammar Gadhafi's Rule Analyzed; U.S. Cash for Libya Transition; Tracking Rebels Advance on Tripoli; Feeling Victory in Libya at Pump

Aired August 22, 2011 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, ANCHOR, SITUATION ROOM: Brooke, thanks very much.

Happening now, breaking news -- the collapse of Moammar Gadhafi's regime unfolding right now. Libyans celebrating as rebel forces gain ground and move closer to a final victory. This hour, extensive live coverage of the fight for Libya.

And the hunt for the man who held an iron grip on the country for decades -- will Gadhafi and his inner circle be brought to justice?

President Obama is warning the fight for Libya is not over yet.

CNN is using its global resources to cover the latest gasps of a brutal regime and a deadly civil war.

To our viewers in the United States and around the world, I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Libyan rebels say their real moment of victory won't come until Moammar Gadhafi is captured. We're following all the breaking news out of Libya.

The State Department in Washington says opposition fighters are believed to control about 90 percent of the capital, Tripoli. And they say they have three of Gadhafi's sons in custody.

But Moammar Gadhafi remains at large. The U.S. government says it believes he's still in Libya. Libya's National Transitional Council says he may have fled to neighboring Chad or Algeria.

President Obama is calling on Gadhafi to surrender and prevent more bloodshed by telling his supporters to lay down their weapons. Some pro-government troops are putting up a fight in pockets of the capital and elsewhere.

The U.S. military confirming just a little while ago that Gadhafi forces fired a SCUD missile near the city of Sirte. That happened today.

CNN's Sara Sidner is one of our correspondents bravely covering this final push by the Libyan rebels.

She's joining us now from Zawiyah in Libya -- Sara, what's the latest?

SARA SIDNER, CNN CORRESPONDENT: What we can tell you that in the city square, in and around that area and around Gadhafi's compound, there were loud blasts of gunfire going off for quite a while in the evening time, just before sunset. We were turned around, actually, by a rebel checkpoint. You know, these checkpoints pop up in different places now. They're trying to take some control of the situation of the area.

And what's happening is, as we heard those blasts, we were told it is not safe, go away, get out of the area, turn around.

So we had to turn around. You could still, though, hear the gunfire.

What we saw earlier in the day and throughout the evening were people in the streets. They were celebrating, a lot of rapid gunfire in the air -- celebratory gunfire, though, that, as opposed to the gunfire that we've heard in the city, which we do understand the rebels are saying that there were snipers in that area, which very, very scary, obviously, if you can't really see where the gunfire is coming from or who's shooting at you or how many.

But they said they were doing their best to get rid of what they call, quote, "mercenaries." And they say that a lot of these mercenaries are from places like Chad, which is why you're hearing these rumors of Moammar Gadhafi of having left the country or going into a different country, such as Chad.

But a lot of rumors, Wolf, I have to tell you. And they have getting stronger and stronger. First they said he was captured. Then they said he was going to surrender. Then they said he was sick. Nobody really knows. But there's a -- a great belief that he is still in the country and perhaps somewhere in Tripoli. When you start asking people in the streets, you will hear that people think that he is believed to be somewhere around there and they can't see how he could have escaped. But no one really knows where -- the whereabouts of Moammar Gadhafi at this point in time.

BLITZER: The rebels do have control. They've captured his three sons.

Do we know what's happened to them, where they are?

SIDNER: We do not at this hour. We do know -- we just happened upon another arrest, another member -- who people think is a member of the Gadhafi regime, one of the most well-known news anchors for Libya state TV. We just happened upon her detention. It happened about 60 minutes before we got to this one building along one of the main drags in Tripoli. They said that this woman -- her name is Hala al-Misrati -- was taken. She got into her car.

So we're seeing these detentions. Obviously, people were very upset, because this is the same woman, Wolf, that was on Libyan state TV holding a gun, saying I will die or you will die, angering the rebels in the streets. They were shooting in the air to try to get people back as the rebels tried to push into the area where they had detained her.

But they said that they had held her and that she is unharmed. But we were unable to see her ourselves.

But it is interesting to note that they are trying to put together some sort of justice in the streets and going after some of the people who they believe are really a part of the Gadhafi regime -- Wolf.

BLITZER: Sara, is there any evidence of retribution yet?

SIDNER: Yes. Now see, this is one of those things that we watch out for, because we know it happened in Benghazi. We know it happened in some of the other cities, where retribution -- and sometimes it was literally neighbor to neighbor, where someone knew that they were strong supporters of the Gadhafi regime or that they were, for example, an intelligence wing and worked for the intelligence wing of the Gadhafi regime.

And in Benghazi there were actual murders, according to a judge I spoke to a few months ago when I was in Benghazi.

And so that's one thing that you always have to watch out for. We have not heard of any of that going on in the city just yet. But there is always that fear, because it seems to crop up after a while, after the rebels sort of get hold of a town, the anger coming out in a violent way.

One more thing to add. One thing we saw today that was different than yesterday, we did see a bit of looting in the city, people saying that these were houses that belonged to the Gadhafi regime or to people who worked for him. And we did see people looting today.

BLITZER: Sara, don't go too far away. Be careful over there. We're going to get back to you soon.

We're also getting word of fierce pockets in pockets of Tripoli, where Gadhafi's loyal troops are still putting up a fight. Intense gunfire has been heard at the Rixos Hotel, close to Moammar Gadhafi's presidential compound. That's also where foreign journalists have been staying, including our own senior international correspondent, Matthew Chance.

Matthew is joining us on the phone -- Matthew, I understand the situation where you are has really deteriorated over the past few hours.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it has, Wolf. It's been really difficult to get any communications out of the hotel. There's no electricity in the hotel. And so we're all kind of sitting in the dark, on the interior -- in the interior sort of upstairs lobby of the hotel, because it's a ferocious gun fight outside -- a battle around the -- the compound of Colonel Gadhafi, that some of the bullets have been flying into the hotel. We've also, you know, been sort of, you know, left here by the -- the Gadhafi loyalists, the -- the government of the country in the sense that all of the minders that were here and the government officials that were here sort of departed sometime yes -- yesterday, as the rebels began their advance into Tripoli.

And what they left behind, instead of just letting us go out into the streets and to do whatever we want, they left behind some, you know, Gadhafi loyalist gunmen in the lobby of the hotel, some of whom are very aggressive. And, you know, so we've all kind of like corralled ourselves onto the upper floors. We're not getting any information at all about what's going on outside of this -- the sort of hotel perimeter, although, of course, what we do know very clearly, because we can hear it, is that we're obviously in one of the pockets of Tripoli that's still controlled by Gadhafi loyalists. And there is obviously very fierce fighting on the way between those loyalists and the opposition figures -- the opposition fighters, rather, to detain all of that area. And it's not surprising to me, Wolf, because this is an area, as we've discussed before, I think, where there are some really important, symbolic buildings, not just the Rixos Hotel, from where all of the journalists have been reported from, you know, this side of -- of the Libyan crises over the past several months, but, also, as I mentioned, the compound of Colonel Gadhafi, as well. And much of the fighting, it seems, is around territory compound for control of it.

BLITZER: Matthew, what's the situation as far as food is concerned?

Because I saw one of your Tweets about the pantry being raided from food at the hotel.

What's going on, as far as food and water?

CHANCE: Yes, it's -- it's -- it's quite a worrying situation, actually. And we -- we've been scouring the place. You know, it's -- it's virtually abandoned, this hotel. We -- we can't -- we can't go out of it. There are still a couple of gunmen in the lobby and gunmen on the gates. But, you know, essentially, we've got the run of the place ourselves.

It's pitch black. So we've spent a couple of hours tonight sort of walking around the kitchens, finding the storerooms. We found some canned food. We found some bottled water. We found some -- some -- you know, some bread which had gone a bit stale.

But nevertheless, we're trying to gather whatever supplies we can and put it all in one place, so that we -- we've got a sort of food store that we've got access to, because the thing is, you know, we're -- we're not being given any indication by the government as to when -- or the Gadhafi loyalists -- as to when we're going to get out of here.

And so we're sort of planning -- sort of hoping for the best to occur but planning for the worst, which is that we're -- you know, we're trying to get as much food and water together, so if we are here for, you know, three or four days, a week, then we'll -- we'll have enough food to get through that. BLITZER: Right.

CHANCE: But hopefully, hopefully, we can, you know, kind of do some deal, negotiate some kind of exit from this hotel, because, you know, really, we -- we don't feel we're getting much in terms of, you know, an overall picture of what's happening in Tripoli. We're just really confined to this one area. The communications are down. There's no Internet. There's no lights. There's no air conditioning. We have no running water.

So it's -- it's become quite -- quite desperate.

BLITZER: So you can't even recharge the batteries for a cell phone, for a satellite phone, I assume you're talking on that right now.

How many journalists are stuck in that compound -- in that hotel together with you?

I know the international journalists have been there.

How many about are -- are with you?

CHANCE: Well, actually, there's about 35, I suppose, all in all. But, you know, on the telephone issue, I mean I'm running out of options when it comes to communication.

I'm using a telephone which has been kindly lent to me by Chinese television, the Chinese television crew here. And they've got this satellite phone which still has battery power in it. And they've very kindly let me -- let me use it for the interviews I've been doing with you and with -- with our sister network, CNN NEWSROOM, before this.

But, you know, when -- when their goodwill runs out, you know, it's very difficult to -- to see how I'm going to get any -- any reports out of the -- out of the hotel. As I say, the Internet is down. All batteries are down in our phones. We've got some satellite phones, but they're not -- they're not working properly.

And so we're having a bit of a nightmare technically. And, of course, we've got no solution to that. And so, you know, we're doing what we can, Wolf.

BLITZER: Matthew, just to be precise, in the lobby of the hotel, there are armed gunmen loyal to Moammar Gadhafi who are threatening to shoot you if you try to escape, to leave this hotel?

WOMAN: There are other armed gunmen at the main gate of the compound who are threatening to shoot anyone who tries to leave, is that right?

CHANCE: You know, they don't characterize it in those terms. What -- what these people say is that, you know, you have to stay in the hotel, because if you don't, you could be shot by others. You know, we're here to protect you. We're not going to let you go anywhere, because we -- we're going -- we're going to protect you.

But you know what, I mean throughout the course of the day we were basically, you know, a lot of the journalists here, myself included, we became quite panicky. We were quite frightened because there were these gunmen downstairs, four -- three or four of them, kind of youngish, green bandanas on, clearly not regular army, carrying Kalashnikov assault rifles, you know, walking up amongst us. They were cocking their guns, telling us that, you know, oh, you know, you guys are spies. You know, you're NATO spies, things like that. And, you know, just really quite hostile.

And we started thinking to ourselves, I mean, you know, as a collective group of journalists here, we started thinking to ourselves, you know, how this is turning really ugly. This could, you know, this could go badly wrong.

And so we've sort of been, you know, keeping ourselves away from those people. We've been trying to, you know, separate ourselves from them as much as possible, keeping ourselves to ourselves. We're not -- we're not taking any -- any pictures inside the hotel. That angers them.

And so we're, you know, not doing that.

But we've tried to ask them repeatedly if we can leave and be picked up and just go to another part of the city or be picked up by, you know, some -- some multinational agency or something like that. That's not being allowed at the moment.

So, you know, we were always under these kinds of restrictions in the Rixos Hotel, with the -- with the government of Libya when we were doing that. But -- but now, with the situation changed so dramatically outside, you know, there is a very real sense in which the tension has gone up a lot and it's become a lot more ugly here.

BLITZER: You know, the -- we used to see those briefings from Gadhafi loyalists, including the various press spokesman that the economy had, Moussa Ibrahim, among others. They have all left, all of the top Gadhafi officials. Saif al-Islam is under arrest, the son of Moammar Gadhafi. We used to see him show up at your Rixos Hotel all the time.

As far as you know, none of the senior officials are still hiding out there?

CHANCE: Well, I mean, it's -- it's -- I mean I can guarantee they're not still hiding out here. It's -- it's -- it's totally deserted, apart from these gunmen, I can tell you.

Yes, the -- the officials left about 24 hours ago. The -- the sort of minders left us, as well. Moussa Ibrahim left with his family, other people, like the broadcasters from state television who were here, they were broadcasting from the basement of the hotel, from a makeshift studio, they've left. They left their cameras there. They left all the sets there. They left all their, you know, desks and leather chairs and, you know, editing equipment and things like that. They've left it all there.

They've just completely vanished. We don't know where they've gone. I mean the assumption is that there's some safe house close by for them, where they've relocated. But, you know, we can't possibly confirm that. We're not allowed to get out of the gates of the hotel.

And, so, yes, I mean it's the same, more or less, where we're pretty much on our own, with the exception of those -- those guards who are essentially keeping us here.

BLITZER: Matthew, be careful over there. We'll try to stay in close touch. Thank your Chinese journalistic counterparts for allowing you to use that phone. We'll get back to you and hoping and praying for the best for you and all of the other journalists there. Thanks very much, Matthew Chance and Sara Sidner in Libya.

Meanwhile Moammar Gadhafi has vowed the only way he'll leave Libya is dead. Will he find sanctuary? Will he be brought to justice? Or will he become a martyr? We'll talk about the ways this bloody conflict could finally end.

And not that long ago some Libyan rebels didn't know how to shoot straight. We're taking a closer look at whether they're ready for a final battle in Tripoli and the challenges after that. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File." Jack?

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, another day, another Middle East dictator on the verge of falling, expect no one can find him. Libyan rebels have control of most of the capital of Tripoli. they said they have three of Moammar Gadhafi's sons in custody. But the main prize, Colonel Gadhafi, it's unclear where he is.

Some think Gadhafi's hiding in Tripoli, others think he may have fled to a neighboring country like Chad or Algeria. The Pentagon said today thinks Gadhafi is still in Libya. If Gadhafi is captured alive, the question becomes what happens to the man who ruled Libya with an iron fist for more than four decades.

The International Criminal Court in the Hague has warrants for the arrest of Gadhafi and one of his sons, along with his brother-in-law who happens to be the head of military intelligence. But it's yet to be seen if the Libyans will want to hand Gadhafi over to the International Criminal Court or perhaps administer their own brand of justice. My money is on the latter.

Look at Egypt. Former president Hosni Mubarak standing trial for the crimes he committed against his own citizens. It's highly unusual for an Arab leader to be called to account by his own people. There are surely millions of Libyans who would like nothing better than to see Gadhafi brought to justice.

Think Saddam Hussein. Since taking power in a 1969 coup, Gadhafi destroyed any and all opposition, even sending hit squads to shoot down Libyans in exile, people he referred to as "stray dogs." Gadhafi's also been tied to some of the most notorious terrorist atrocities worldwide before the 9/11 attacks, including the bombing of Pan Am flight 103. So the question is this, what should happen to Libya's Moammar Gadhafi if he's captured? Go to CNN.com/CaffertyFile and post a comment on my blog or go to our post on "THE SITUATION ROOM" Facebook page and render your opinion there. Seems strange to me, Wolf, with all the sophisticated satellites and communications and spying equipment that nobody knows where this guy is.

BLITZER: How long did it take to find bin Laden?

CAFFERTY: True, and it took a while to find Saddam Hussein. They found him in some hole somewhere. That was a long while after the invasion happened. So, yes, you're right.

BLITZER: OK, Jack, thank you.

The Libyan dictator insists he won't be captured but instead will go down fighting. Listen to what he said back in February.

(BEGIN VIDEO CLIP)

MOAMMAR GADHAFI, LIBYAN LEADER (via translator): It's not possible that I leave this place. I will be a martyr at the end.

(END VIDEO CLIP)

BLITZER: Let's discuss, get some analysis with Fareed Zakaria. He's the host of CNN's "FAREED ZAKARIA'S GPS." He's also editor at large of our sister publication "TIME" magazine. Is he the type, Fareed, to become a martyr, or just surrender and hope for the best? Do you think he's going to fight or surrender?

FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": My gut is he'll fight. Gadhafi is very different from Mubarak or Ben Ali, the leaders of the Arab spring so far that we're been dealing with, including Assad in Syria. These are all bureaucrats or sons of the founders.

Gadhafi is a founder. He was a revolutionary. He was a rebel. He actually initiated the coup that brought him into power. He is more a Castro-like figure, originally very charismatic, populist figure, also very militarily skillful and accomplished, somebody who takes risks. He's not a bureaucrat. He's not going to lay down the sword and go quietly into the night.

Of course, if he feels like he is outnumbered and there's certainty, who knows? But my gut is this guy's going to fight till the end.

BLITZER: We're showing our viewers a picture of when you interviewed Gadhafi a couple of years ago, right, Fareed? That was in New York. Give us a little reflection on who this man is because the whole world wants to know where he is, will he be captured and what happens to him.

ZAKARIA: He is without question the strangest foreign leader I have ever interviewed. He kept us waiting for hours on end. We were in the Libyan mission to the U.N. because he insisted he had to be someplace where he could pitch a tent. He tried to rent Donald Trump's house in Bedford, New York. That didn't work out, so they pitched a tent in the Libyan mission. There were guerrilla clad women, his Amazonian guard with Kalashnikov's wandering around. His son, who was one of the ones who hasn't been captured yet, who was actually the leader of the rebel guards, was the guy I was negotiating with to get the interview.

And then finally hours later this guy turns up, an atmosphere of complete chaos, and he seemed like he was on drugs. He seemed completely out of it. He seemed bizarre, constantly quoting from his own green book, unaware of what was going on around him. You certainly had the feeling that this was a regime where the intelligence elements, his sons were very tightly in control. They were the COOs, the operational heads of the regime. And he had some weird mystical, sort of place in that firmament.

But of course that may well have been an act. It was the strangest interview. He went on and on, series of non sequitors, very difficult to understand what he was saying. It was like interviewing Yoda.

BLITZER: Really, I remember you once describing that to me. Once the rebels capture him, assuming they capture him alive, what will they do with him? Will they put him on trial in Libya, send him to International Criminal Court in the Netherlands. What do you think they'll do with him?

ZAKARIA: My guess is, as Jack Cafferty was saying, they will probably try him in Libya. I think every country prefers to do that by themselves.

But I have to say the Libyan opposition so far has shown itself to be quite responsible, so I don't think it will be a show trial. I don't think there will be an immediate execution. I think it's interesting to listen to what they have saying. They almost seem to have learned the lessons and the mistakes of the Iraq occupation better than we, the United States, did. They're emphasizing they want to keep intact the police. They want to keep intact all administrative services, the health system. They don't want to disband anything. They want to be inclusive. They made a reference that everyone will share in Libya's future.

So in that context, you have to imagine that they're going to try to deal with Gadhafi in a way that doesn't send a signal of retribution. This is not going to be the French Revolution and the guillotine, rather some kind of legal process, some kind of fair trial.

BLITZER: Fareed, thanks very much. We'll stay in close touch with you as well. "FAREED ZAKARIA GPS" airs Sundays here on CNN.

Check out my blog, by the way. I write about if you're in Damascus watching what's going on in Tripoli and your name is Bashar al Assad, how this might affect you. Go to CNN.com/SituationRoom to check out my blog on what's happening in Libya right now.

Meanwhile as rebels close in on Gadhafi, there are new concerns here in the United States about the security of his weapons stockpile. Just ahead I'll ask the Libyan ambassador for the transitional government just how safe the situation is.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer. More Libya angles we're monitoring for our next hour. Inside NATO's plan of attack -- just ahead, how the international alliance helped rebels close in on Moammar Gadhafi.

Also, President Obama praises the six-month mission bringing down a dictator 42 years in the making. And Republican Senator John McCain says that's too long.

Stand by for my interview with Senator McCain. That's coming up live.

And what happens if Gadhafi is turned over to the International Criminal Court?

We want to welcome our viewers in the United States and around the world. You're in THE SITUATION ROOM.

We're told the State Department here in Washington is focused like a laser right now on getting funding to the Libyan opposition.

Let's bring in our foreign affairs correspondent, Jill Dougherty, who's working the story for us.

You also learned about a last-minute appeal, Jill, by Gadhafi to the United States. What's going on?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Yes, really some fascinating stuff, Wolf.

You know, right now, at the briefing today here at the State Department, they said that 90 percent of the city of Tripoli, the capital city, is in the hands of rebels, but they say there's another big battle looming, and that's a political battle for a functioning democracy.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): Right up to the last minute, before Libyan opposition forces launched their assault on Tripoli, officials close to Moammar Gadhafi reached out to the U.S. in a desperate attempt to stop the attack. That's what a senior State Department official tells CNN.

Assistant Secretary of State Jeffrey Feltman says there was a "sense of desperation," an attempt by the regime to "buy time." The Libyans claim they wanted to negotiate, but refused to talk about Moammar Gadhafi leaving power, he says.

Now, as the rebels try to consolidate their military gains in Tripoli, the opposition National Transitional Council in Benghazi is trying to activate plans for a political transition. First priority, security.

VICTORIA NULAND, SPOKESPERSON, STATE DEPT.: Because we don't need any more civilian life lost in Libya. DOUGHERTY: U.S. officials say they're encouraged by reports that the rebels have set up checkpoints around public buildings to promote public safety. "Tripoli does not look like Baghdad looked after the fall of Saddam Hussein" with widespread looting, Assistant Secretary Feltman says. Next step, an interim authority.

NULAND: The Transitional National Council would broaden, become an interim government that would represent a broad cross-section of Libyans from different walks of life, different parts of the country, different political backgrounds.

DOUGHERTY: But tribal loyalties, control over oil revenues and over Libyan government assets, including $30 billion worth frozen by the U.S., could cause rifts in the opposition.

A former undersecretary of state warns things could turn ugly.

NICHOLAS BURNS, HARVARD UNIVERSITY: I think we're going to have to expect to see a slow transition, perhaps a chaotic transition, perhaps even, unfortunately, a violent transition. That wouldn't be surprising at all given the degree of disaffection and disunity that this country has suffered for so long.

(END VIDEOTAPE)

DOUGHERTY: Now, getting that interim government in place as soon as possible is really critical, the State Department says. It would lay the basis for writing a constitution and for moving to elections. They are the building blocks of democracy, something that Libyans have really been deprived of for the last 40 years under Moammar Gadhafi -- Wolf.

BLITZER: What a story, Jill. Thanks very much.

Let's go in-depth right now with the national transitional government's ambassador to the United States, Ali Aujali. He previously served as Gadhafi's ambassador to the United States, but broke many months ago with Gadhafi.

Now you represent the opposition, the rebels recognized by the Obama administration now as the legitimate government of Libya. So you're a happy man.

ALI SULEIMAN AUJALI, HEAD OF LIBYAN MISSION TO U.S.: I'm a very happy man. I'm a very happy man since yesterday, when Tripoli became under control of the TNC.

BLITZER: It's moved so --

AUJALI: -- in a short time and with less casualties.

BLITZER: Because it's moved so quickly. We had dinner together. We are an Iftar dinner at the ambassador of Qatar's residence two weeks ago, and you were so depressed, you were worried, it didn't look right.

What changed it so quickly?

AUJALI: Well, I think the TNC is in better shape. They are very well organized. The communication between the TNC and the leader of the military groups in the western part is very important and very smooth. And the achievement by the fighters in the western mountains of Libya, they did a great job, because this is important.

Tripoli always -- always an invasion of Tripoli from the west, not from the east. And that's exactly what happened.

BLITZER: Where is Moammar Gadhafi?

AUJALI: In Tripoli, I guess.

BLITZER: In Tripoli?

AUJALI: I guess.

BLITZER: Where in Tripoli?

AUJALI: I wish I know. Then I can tell Mr. Abdili (ph) now to get him straight away. I think in Tripoli. Probably, maybe, he's in his compound. It is a stronghold. Maybe it's one of the hospitals where some soldiers are still around.

Maybe he's at one of the hospitals. He sleeps in the hospitals.

BLITZER: Because he's often gone to hospitals thinking that it's almost like an human shield for him, that no one would bomb a hospital.

AUJALI: That's right.

BLITZER: And he could be -- so you think he might be in one of those hospitals?

AUJALI: Exactly. That's where he's been, children hospitals, maternity hospitals.

BLITZER: But you're convinced it's only a matter of time, a short amount of time, before they find him?

AUJALI: I hope so. I hope so. And I think to find him is a very crucial matter. It is very important for all security.

BLITZER: What will you do with him, your government, once you find him?

AUJALI: Well, I think that the Libyan people have to answer this question. Let us find him first, and then the Libyans, they will take care of him. There are two options, I think. There is no third one.

BLITZER: What are the two options?

AUJALI: Either that he presents to the Libyan court, or either the Libyans there decide to send him to the ICC. BLITZER: What do you personally prefer?

AUJALI: To me, maybe if the situation is like this now, we have to take other issues into consideration. Maybe to me, the ICC is the right choice, maybe. But I think the Libyan people do not agree with me.

BLITZER: Because you know a lot of Libyan people would be very upset if they let him leave the country given what he's done.

AUJALI: Yes. But my concern is the security situation.

BLITZER: I know. You're a diplomat, so you have a different level of concern.

His sons -- Saif al-Islam specifically, he's under your control.

AUJALI: That's right.

BLITZER: What are you going to do with him?

AUJALI: The same thing with his dad.

BLITZER: Where is he being held?

AUJALI: This I don't know, but I know that he's under the TNC control.

BLITZER: We heard today from the chairman of the House Intelligence Committee here in Washington, Mike Rogers, saying his major concern is these stockpiles of poisonous gas that the Libyan military had, the sarin gas, the mustard gas, other poisonous gases, the weapons of mass destruction, as they used to be called.

How concerned should the world be that Gadhafi and his supporters may still have control over these kinds of weapons?

AUJALI: Well, Gadhafi is unpredictable. He will do anything now.

Now, because, why is he killing the Libyan people until today? He was going to win this battle? No. But this is revenge.

He just wants to kill. He wants to teach the Libyan people a lesson. He will do anything against his own people, but I believe he doesn't have the means and the space and the ways to act to take this action.

BLITZER: But he still controls his forces, a chunk of Tripoli. Right?

AUJALI: They control a small pocket. One of them is Bab Al-Aziziya.

BLITZER: That's the presidential compound.

AUJALI: Yes, but 90 percent of it is under the control of the TNC.

BLITZER: And his other two sons, Mohammed and Saadi, they're under your control?

AUJALI: Mohammed, he was captured yesterday, was arrested yesterday. And then, when they want to take him somewhere else for his protection, Mr. Abjalil (ph), he interfered and let him stay where he is, according to his request. But I do understand --

BLITZER: So he's escaped?

AUJALI: I do understand that he escaped today.

BLITZER: He did escape? How is that possible? I mean, the son of Moammar Gadhafi. I understand Saadi is under your control. Saif al- Islam is under your control. But Mohammed escapes after he's arrested by the forces?

AUJALI: Well, Mohammed is less aggressive among his brothers.

BLITZER: So they let him escape?

AUJALI: And then Mr. Abjalil (ph), he wants to deal with him this way, because Mohammed, he is the first son from a different woman, not from the same wife now Gadhafi has. And then they want to show the world that this is the TNC, how they are dealing with Gadhafi's sons.

BLITZER: So they let him go?

AUJALI: They don't let him go. He had been hijacked by maybe Gadhafi's forces.

BLITZER: It sounds very strange.

AUJALI: It sounds very strange to me --

BLITZER: To me it sounds very strange.

AUJALI: -- and a little bit upset, also.

BLITZER: Hijacked? I mean, it sounds like there was a plot to get him free.

AUJALI: Exactly, because when they surrounded the security forces from the Libyan national army, when they surrounded the House, the residence of Mohammed, he came out voluntarily. And they said -- asked him, "What do you want to do?"

They said, "OK, you are under arrest. We want to take you." He said, "No, I am not leaving my House."

And then they communicate with Mr. Abjalil (ph). He spoke to him, and then they allow him to go under the protection of some guard. You know, they are new, they are not all of them professional fighters, or professional police. They are young people that take care of them. We don't know the story, how he was taken out from his House.

BLITZER: Mr. Ambassador, we've got to leave it there, but we'll stay in close touch with you. Good luck to you. Good luck to all the people of Libya.

AUJALI: Thank you.

BLITZER: It's a sensitive, sensitive moment in the history of North Africa and the Middle East right now.

AUJALI: Thank you, Wolf.

BLITZER: Appreciate it.

AUJALI: Appreciate it.

BLITZER: Brian Todd is over at the Data Wall to track the rebels' advance on the Libyan capital and the pockets of resistance. We'll go there when we come back.

(COMMERCIAL BREAK)

BLITZER: Just four months ago we showed you images like this, a rebel armed with a shoulder-fired surface-to-missile launcher that was pointing in the wrong direction.

Brian Todd has been tracking the rebels' advance on Tripoli. We're going to go over to Brian, take a closer look.

All right, Brian. How did these rebels go from they can't hold the weapon correctly to, all of a sudden, taking over Tripoli?

BRIAN TODD, CNN CORRESPONDENT: Right. It was an extraordinary image from four month ago, Wolf. Experts say several reasons for the advancement toward Tripoli and the improved performance of the Libyan rebels.

First of all, they've gotten better weaponry. They've gotten weapons from Qatar, from France, from other places, and have essentially learned how to use those weapons.

Second, they cite the presence of Western Special Forces on the ground in Libya training the rebels how to fire the weapons, training them in better tactics, better logistics. Essentially, how to be a more disciplined force, how to take orders, and where -- to go when and where and get to the places in a streamlined way.

Also, what we're told is that in recent days, over the past week, especially, the coordination between NATO and the rebel forces has been very, very sharp, lethal, in fact, according to some experts, with the rebels being able to pinpoint for NATO where some of the Gadhafi forces have been massed, NATO in turn giving the rebels better intelligence on the ground. As a result, we've had kind of a flanking movement essentially toward Tripoli from the south and west.

You have it from the Nafusah Mountain range, where the rebels had their stronghold in the southwest. And that one flank going toward Tripoli, from the southwest, there. Another from the city of Zawiya, going directly west into Tripoli in recent days. That coordination, Wolf, between NATO and the rebels, that improved coordination, especially over the past week, really less than a week, is the reason why the rebels right now have control of most of Tripoli.

BLITZER: And a lot of these rebels are totally inexperienced, but they're moving in Tripoli.

Show us -- take us inside Tripoli right now, Brian. Show us the flash points, what's going on.

TODD: There are a few, Wolf. And not all of Tripoli is in rebel hands.

What we're told is the rebels claim they have at least 80 percent, some U.S. officials believe they have 90 percent of the city. But there are a few flash points.

The rebels have captured state TV. That's gone dark while the rebels figure out what to do with it.

What they're afraid of now -- the rebels we're talking about -- is Gadhafi massing his forces around this infamous compound, Bab Al- Aziziya, very fortified. He's still got loyalist forces around that area. There has been fighting there. What the rebels are concerned about is that they're going to mass really in an intense way and have a very intense fight, outward, if there's more pressure put to bear on them at that compound, which there undoubtedly will be in the next couple of days.

A couple of other flash points.

You just spoke to Matthew Chance a little while ago. A very, very precarious situation at the Rixos Al Nasr Hotel.

Up until recently, clearly in the hands of Gadhafi loyalists. But as Matthew told you, the minders have left, they have left Gadhafi loyalist gunmen in charge there. It's very chaotic, heavy fighting near that hotel. That's up for grabs.

Green Square, another area very interesting, Wolf. We're going to take you in there.

We had images from Sunday night. When you were anchoring, you were seeing this.

The rebels in Green Square, firing shots in the air in celebration, giving the impression that they had the square under their control. Well, what we're told now is that the rebels have essentially come out of the square. Not out of the area completely, but have pushed back out of the square and are planning to return back in.

The reason? They are concerned about sniper positions in and around Green Square and all over Tripoli. That is of main concern. They have not gone back into Green Square in force. They are planning a final push into Green Square, very symbolic.

BLITZER: Yes, Sara Sidner, with her crew, they have been there twice. Twice, the rebels have said you'd better get out because it's precarious, it's very dangerous. TODD: Right.

BLITZER: Brian, thanks very much.

Brian Todd, reporting.

Good report.

As we watch the collapse of Gadhafi's regime, we can also see an impact on the world's oil supply and the price of gas. The final battle in Libya could affect all of us.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Obama says Moammar Gadhafi's regime is "clearly coming to an end." That's a direct quote.

A little perspective on how long Gadhafi has ruled Libya.

The United States has had eight presidents over the course of his reign. When he took power in September, 1969, Richard Nixon was in the White House. President Obama was only 8 years old.

That same year, Americans landed on the moon for the first time, "Sesame Street" debuted, gasoline cost 35 cents a gallon. Forty-two years later, Gadhafi is almost gone.

Meanwhile, a rebel victory in Libya could have positive ripple effects for all of us at the gas pump.

Mary Snow is working this part of the story for us.

All right. The impact on gas, Mary, what's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, what we saw today in international markets was reaction to the expectation that Libyan oil production may soon resume. Brent Crude, the European benchmark, was lower, but there are still many unknowns about Libya's oil facilities.

(BEGIN VIDEOTAPE)

SNOW (voice-over): As the Gadhafi regime falls, one of the big questions is, what happens now to one of Libya's biggest assets, its oil? Libya supplied about two percent of the world's oil until civil war broke out in February, bringing production to a virtual halt.

(on camera): Before the war started, Libya was producing about 1.6 million barrels of oil a day, and it has one of the largest reserves in Africa, with about 46 million barrels of oil in its reserves. It exports most of its oil, and its biggest customers are in Europe. Italy gets about 28 percent of its oil from Libya. France is its second biggest customer.

(voice-over): While Europe will feel bigger impact than the U.S. since the U.S. doesn't use Libyan crude oil, one energy analyst says drivers everywhere could wind up paying less at the pump.

PETER BEUTEL, ENERGY ANALYST, CAMERON HANOVER: It will have an impact on worldwide gasoline prices, and that will end up helping U.S. consumers by about four to six cents a gallon, I predict, over the next month or two.

SNOW: That timetable is up for debate.

What's unknown is how much damage has been done to refineries, pipelines and oil wells. And then there's the political question.

HELIMA CROFT, SR. GEOPOLITICAL STRATEGIST, BARCLAYS CAPITAL: If you don't have a stable security environment in Libya, if you have the sense that you're looking at a protracted political and security power vacuum, Western companies are going to be reluctant to go back in.

SNOW: There are predictions it could take 18 months to three years for Libya to restore its oil production to full capacity, but analyst Peter Beutel doesn't see Western countries allowing that to happen.

BEUTEL: Here's an opportunity for them to help a struggling democracy stand on its own two feet. If that means every single oil expert from Texas to Rotterdam is suddenly on a plane to Libya to get their oil up and running, I think there's a chance that that could happen.

(END VIDEOTAPE)

SNOW: Now, some of the U.S. energy companies that were in Libya and had to leave said they have no timetable on when they would send personnel back into the country. One company though, Marathon Oil, told us today that it's had preliminary talks with the National Transitional Council about coming up with a working plan to restore production when the situation stabilizes -- Wolf.

BLITZER: All right. Thanks very much, Mary, for that report.

Gadhafi is at large. Rebels are going after his family and inner circle. We're taking a closer look at the fate of his sons.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: The breaking news this hour, the battle for Libya. We don't know where Moammar Gadhafi is right now -- lots of speculation -- but we just learned that one of his three sons who had been captured by rebel forces has in fact escaped.

We're talking about his youngest son, Mohammed. The Transitional Council's ambassador to the United States described him here in THE SITUATION ROOM as being hijacked. Mohammed Gadhafi reportedly was conducting a phone interview with the Al Jazeera TV network when rebels first surrounded his home.

(BEGIN VIDEO CLIP) MOHAMMED GADHAFI, MOAMMAR GADHAFI'S SON (through translator): I'm standing outside my house. I'm being attacked right now. There's gunfire outside my house. They're inside my house.

Goodbye. Goodbye. Goodbye.

(END VIDEO CLIP)

BLITZER: Rebel leaders say they believe Gadhafi's four other sons are either in hiding or they've run away. Another Gadhafi son, Saif al- Arab, was killed in a NATO air strike back in April.

There's much more on the dramatic situation unfolding in these moments in Libya. Just ahead, we're going back to CNN's Sara Sidner. She's on the ground with the rebels. We'll get the latest.

(COMMERCIAL BREAK)

BLITZER: Jack is back with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: What ought to happen to Libya's Moammar Gadhafi if he's captured and he doesn't get away, like apparently one of the kids did?

B. writes from Pennsylvania, "I would love to see a democratic government formed and a civilized trial held. A the end of the trial, they would take Gadhafi to the gallows and hang him."

"The oil will start flowing again, and the price of gasoline would come down to the prediction made by Michele Bachmann of $2 a gallon. Tripoli would then become a large tourist attraction for people to go on their vacation. When I dream, I dream big."

James in Denver writes, "He ought to have as fair a trial as possible. We can't consistently accuse a man of human rights violations and then treat him as if we didn't believe in his own rights. That is also why Osama bin Laden should not have been murdered. From the description of his demise, it seems clear he could have been captured and given a trial."

Robert writes, "Gadhafi should be turned over to the International Criminal Court, along with his three sons. Failure to do so will show the world what the Libyan Transitional Council is really all about. And by the way, who is going to govern Libya?"

Ed in Harrisburg, Pennsylvania, "He ought to be asked how he likes to spell his last night for his obituary and then shot."

Rick says, "That shall be up to the people of Libya. Considering the violent nature of that part of the world, I would expect their actions to be violent."

Joe on Facebook writes, "He ought to be arrested and held accountable in a court of law, facing his victims or families of his victims. This is an opportunity for the Libyan people to demonstrate that they are better than Gadhafi, and it would be an appropriate beginning to a new democratic state."

Kevin in California suggests, "He ought to be returned to Lockerbie from 30,000 feet."

If you want to read more on this, you can go to my blog, CNN.com/caffertyfile, or through our post on THE SITUATION ROOM'S Facebook page, where the quality of the communications continues to improve -- Wolf.

BLITZER: It certainly does, Jack. Thank you.