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Libyan leader Moammar Gadhafi plays chess with Kirsan Ilyumzhinov, the president of the international chess federation, in Tripoli on June 12, 2011 in this still image taken from video broadcast on Libyan state television.REUTERS TV/Reuters

France has offered Libyan despot Moammar Gadhafi an olive branch, calling for talks between rebels and the regime and suggesting the unpredictable ruler even might be allowed to remain in Tripoli.

Until now, France had been the most hawkish of Western governments, the first power to recognize the rebels and the only one to push far beyond the UN protection mandate and air drop weapons and ammunition to anti-Gadhafi units. Widely seen as a reversal from Paris, the gambit also hints at worsening cracks in the NATO-led alliance.

Col. Gadhafi can "be in another room in his palace with another title," France's Defence Minister Gerard Longuet said, suggesting the wily, self-styled African "king of kings" might be able to remain in Libya, albeit out of power.

Meanwhile, Saif al-Islam, one of Col. Gadhafi's sons, claimed the regime was in direct talks with the French government, saying Paris had opened negotiations even as French Mirage warplanes were dropping bombs on Tripoli. " The truth is that we are negotiating with France and not with the rebels," the Libyan leader's son said.

In the wake of Mr. Longuet's surprising comments, both the Obama administration and the British government insisted there had been no change in alliance strategy and that Col. Gadhafi must leave Tripoli.

What's required from Col. Gadhafi, said Victoria Nuland, spokeswoman for the U.S. State Deepartment, is the same: "Whether you're in Paris or whether you're in Washington. He needs to end his military actions. He needs to pull his forces back to barracks. He needs to step down from all of his titular roles, and then a real conversation could begin about his future."

But even the American formulation seemed to open new wiggle room for Col. Gadhafi to remain - perhaps retire - in Libya, despite an indictment for war crimes issued by the International Criminal Court.

France's Foreign Ministry officials insisted the French government hadn't shifted, saying Paris had always favoured a ceasefire and a negotiated solution ever since the Arab Spring uprisings reached Libya. They also denied being in direct talks with Col. Gadhafi, although they conceded that French envoys had passed messages to the Libyan leader.

Italy, another key player because its bases host most of the warplanes - including Canada's - pounding Libyan targets, has also mooted the possibility that Col. Gadhafi could remain in power during talks on the future political makeup of Libya.

Russia has accused the Western powers of exceeding their UN Security Council mandate - which called only for enforcement of a "no-fly" zone and the protection of civilians from Col. Gadhafi's forces - and has called for peace talks. So has the African Union.

Until this week, those calls have been largely dismissed by the major Western powers - whose warplanes under the command of Canadian Lieutenant-General Charles Bouchard have been pounding Libya's military and Col. Gadhafi's command compound.

But for the last two months, rough stalemate has continued with ill-equipped rebels controlling the eastern half of the country while forces loyal to Col. Gadhafi maintaining an iron grip on the capital Tripoli and much of western Libya.

Rebels in the so-called TNC (Transitional National Council) have refused to talk to the regime unless Col. Gadhafi is gone, creating a political stalemate to match the military one. But if France is willing to push the rebels into negotiations with Col. Gadhafi or his inner circle, then the prospect of accepting a divided Libya seems certain to surface.

As the bombing campaign nears 120 days, costs of have soared, especially for Britain and France, whose warplanes fly more than 50 per cent of the total missions. Some countries have run out of bombs and are 'borrowing' them from the Americans. Pressure is mounting across the alliance to bring the war - whose extended UN mandate runs out in September - to a close.

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