Qaddafi's prime minister told a French daily the embattled regime was ready to begin talks with Paris and Libyan rebels "without preconditions" and without the interference of its authoritarian "Guide".
France -- which has spearheaded the Western diplomatic and military response to the crisis -- confirmed it is in indirect talks to bring the fighting to an end and to smooth Qaddafi's departure.
"A political solution in Libya is more vital than ever and it is beginning to take shape," Prime Minister Francois Fillon told MPs before the National Assembly and later the Senate both voted to extend France's role in military action.
"The Guide will not take part in these discussions. Everything must be open," Libyan Prime Minister Baghdadi al-Mahmudi told France's Le Figaro newspaper, in an interview conducted in Tripoli and published Tuesday.
"We are ready to negotiate unconditionally," he said, although he called on NATO to halt air strikes. "We simply want a stop to the bombardments so that one can talk in a serene atmosphere. We cannot talk as bombs rain down."
A NATO spokesman however said that bombing would continue, even through the holy Muslim fasting month of Ramadan in August, so long as Qaddafi's forces attack civilians.
Mahmud Shammam, spokesman for the rebel National Transitional Council (NTC), told AFP the revolutionaries would only respond to "serious initiatives" that include the departure from power of Qaddafi and his sons.
He said Beshir Saleh, a Qaddafi ally, had approached France to propose the strongman step down but remain in Libya under international supervision, but that Qaddafi's influential son Seif Al-Islam had vetoed the idea.
In a sign of continued tensions, Libyan government spokesman Mussa Ibrahim said Tripoli regretted the French parliament vote to prolong the country's military intervention.
"We regret the vote of French elected officials. We had hoped representatives of the French people consider the situation in Libya in a realistic way, ignoring the lies of the government and media," Ibrahim told AFP.
France has previously insisted military action will continue until Qaddafi quits power but, with the costly campaign now four months old, Paris appears ready to talk.
"There have indeed been contacts, but it has not turned into a real negotiation," Foreign Minister Alain Juppé told France Info radio. "The Libyan regime is sending messengers everywhere: to Turkey, New York, Paris.
"We are meeting envoys who say to us: look, 'Qaddafi is ready to go, let's talk about it'," he added.
"The conditions for a ceasefire are not yet met," Juppé said, declaring that Qaddafi must admit UN monitors, return his troops to barracks and declare that he "is withdrawing from political and military power".
Libya has been run by Qaddafi since he led a 1969 revolution, but has been in ferment since the wave of democratic revolutions sweeping the Arab world spread to its cities in February.
Regime forces brutally suppressed street protests in the west of the country, but much of the east fell under the sway of the NTC rebels.
When it appeared that loyalist forces might be preparing to crush the rebel capital Benghazi, western forces led by Britain and France intervened, enforcing a no-fly zone and carrying out airstrikes on government targets.
The military situation has now stabilised, with much of the country in rebel hands, but Qaddafi's forces still in control of Tripoli and most western towns.
Several world powers, including Russia, Turkey and now France have tried to negotiate an end to the fighting, but Qaddafi's camp has remained publicly defiant, despite reports of behind the scenes manoeuvres.
On Monday, US President Barack Obama told his Russian counterpart Dmitry Medvedev that Washington will support the Kremlin's bid to resolve the conflict if Qaddafi agrees to step aside.
France has been building support in the African Union for its attempt to negotiate Qaddafi's departure.
Juppé visited AU headquarters in Addis Ababa on Sunday, and French officials say that -- despite their traditional opposition to outside pressure -- leading members were now ready to accept Qaddafi's fall.
On the ground, Libyan rebels in the Jebel Nafusa highlands south of Tripoli were preparing to advance on the capital, eyeing the town of Asabah after capturing a string of hamlets.
"This will be the most important battle of the Nafusa Mountains," rebel commander Wael Brachen told AFP at the front. "This is the last town before Garyan and... it is full of armed Qaddafi supporters."
Since guerrillas took the village of Gualish on Wednesday, 17 kilometres (11 miles) from Asabah, they have been awaiting NATO airstrikes that will clear their way for an advance.
A rebel statement sent from their embattled enclave in Misrata, a coastal city just east of the capital, said 10 NTC fighters had been killed and 22 wounded on the western front.