Libyan leader Col Muammar Gaddafi has told the BBC he is loved by all his people and has denied there have been any protests in Tripoli.
Col Gaddafi said that his people would die to protect him.
He laughed at the suggestion he would leave Libya and said that he felt betrayed by the world leaders who had urged him to quit.
US ambassador to the UN Susan Rice said the interview showed Col Gaddafi was "delusional" and "unfit to lead".
World foreign ministers earlier condemned attacks on Libyan civilians and the European Union imposed sanctions including an arms embargo, asset freeze and travel ban on Col Gaddafi and his close entourage.
Col Gaddafi is facing a massive challenge to his 41-year rule, with protesters in control of towns in the east.
'Mercenaries and thugs'
Col Gaddafi was speaking in an interview in Tripoli with BBC Middle East editor Jeremy Bowen, US TV network ABC, and the UK's Sunday Times newspaper.
Col Gaddafi accused Western countries of abandoning Libya and said that they had no morals and wanted to colonise the country.
When asked whether he would resign, he said he could not step down as he did not have an official position and insisted that the power was with the people.
Col Gaddafi challenged those, including UK Prime Minister David Cameron, who have accused him of having money abroad, to produce evidence.
He said he would "put two fingers in their eye".
Col Gaddafi said true Libyans had not demonstrated but those who had come on to the streets were under the influence of drugs supplied by al-Qaeda.
He said those people had seized weapons and that his supporters were under orders not to shoot back.
Ms Rice said Col Gaddafi was "frankly delusional".
"When he can laugh in talking to... journalists while he is slaughtering his own people, it only underscores how unfit he is to lead and how disconnected he is from reality," she said.
Earlier, foreign ministers who had gathered at a UN human rights conference in Geneva called for Col Gaddafi to go.
US Secretary of State Hillary Clinton accused Col Gaddafi and his followers of using "mercenaries and thugs" to attack unarmed civilians, and of executing soldiers who refused to turn their guns on fellow citizens.
"It is time for Gaddafi to go, now, without further violence or delay," she said.
Mrs Clinton also said that although US naval vessels were being repositioned near Libya there was no military action pending.
When asked whether the US would back Col Gaddafi going into exile, Mrs Clinton said: "If violence could be ended by his leaving... it might be a good step but we believe accountability must be obtained for what he has done."
The US Treasury said it had blocked $30bn (£18.5bn) in Libyan assets - the largest sum it had ever frozen.
US President Barack Obama met UN Secretary General Ban Ki-moon at the White House on Monday and both expressed concern at the rising violence and called for a legitimately elected president.
Mr Ban said of Col Gaddafi: "He lost legitimacy when he declared war on his people."
'Blood of martyrs'
Although protesters have secured towns in the east, Col Gaddafi shows no signs of giving up in and around Tripoli.
In Tajoura, a suburb of the capital, about 400 people protested against him on Monday, chanting: "The blood of martyrs won't go to waste." Gaddafi supporters have reportedly tried to break up the protest by firing into the air.
Reporters say there have been long queues at banks in the capital as people tried to collect the 500 dinars ($410) promised to all families by the government in an attempt to quell the unrest.
There has been fighting in the coastal town of Misrata, 200km (125 miles) east of Tripoli, with Col Gaddafi's opponents repelling a government counter-attack.
Anti-government forces still control Zawiya, 50km west of Tripoli, but pro-Gaddafi forces are surrounding the city. One resident told Reuters: "We are expecting attacks at any moment... They are in large numbers."
Libyan air force planes also reportedly attacked ammunition depots in the eastern towns of Ajdabiya and Rajma.
Deputy foreign minister Khaled Kaim said the authorities would attempt to talk to protesters in the east, but added: "If all attempts and efforts for dialogue... are exhausted, a very well guided force will be used in accordance with international rules."
About 100,000 people have fled anti-government unrest in Libya over the past week, the UN estimates.
The exodus of Egyptian workers from western Libya began on Wednesday, but has since been intensifying, says the BBC's Jim Muir at the Ras Jdir border crossing with Tunisia. About 1,000 people an hour are crossing into Tunisia, he says.
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