"One of the possibilities being considered is that he stay in Libya but on the clear condition that he steps aside from Libyan political life," the minister, Alain Juppe, told LCI television.
"That is what we are waiting for before we start the political process for a ceasefire," he added. "The ceasefire comes about by a formal and clear commitment by Qaddafi to give up his civil and military responsibilities."
France is taking part in NATO-coordinated strikes against Qaddafi's military assets and was the first outside state to formally recognise the rebels' Transitional National Council.
Libyan rebel military leaders from the city of Misrata were due to meet French President Nicolas Sarkozy on Wednesday seeking extra aid for their fight, a source close to their delegation told AFP on Tuesday.
Sarkozy will host General Ramadan Zarmuhwith, Colonel Ahmed Hashem and Suleiman Fortia, a local leader from the coastal city west of Tripoli, on Wednesday morning in Paris, said the source, who asked not to be named.
Sarkozy's office declined to comment.
The International Criminal Court has issued an arrest warrant for Qaddafi on charges of crimes against humanity during his crackdown on the uprising against him that began in mid-February.
It is unclear whether he would avoid being taken to the court in The Netherlands if he remains in Libya under a ceasefire deal.
"That point is not currently under discussion," Juppe said. "There are procedures that must be followed and we will see afterwards in light of the negotiations what will come of that."
Pushing a major offensive against forces loyal to Qaddafi, the rebels claim to have taken the key oil town of Brega.
"Things are progressing," Juppe said, but "they are not yet at a spectacular turning point."