TRIPOLI/MADRID - Libyan leader Muammar Gadhafi vowed to attack "homes, offices and families" in Europe in revenge for NATO airstrikes but US Secretary of State Hilary Clinton said he should quit instead of issuing threats.

In a telephone address relayed to some 100,000 supporters in Tripoli's Green Square, Gadhafi urged NATO to halt its bombing campaign or risk seeing Libyan fighters descend on Europe "like a swarm of locusts or bees".

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Gadhafi, who along with his son and spy chief faces an international arrest warrant for crimes against humanity, has vowed to fight to the end and branded the NATO operation a colonial aggression aimed at securing Libya's oil riches.

"Retreat, you have no chance of beating this brave people," Gadhafi said in his address broadcast on Friday.

"They can attack your homes, your offices and your families, which will become military targets just as you have transformed our offices, headquarters, houses and children into what you regards as legitimate military targets," he said.

"If we choose, we can descend on Europe like a swarm of locusts or bees. We therefore advise you to retreat before you face catastrophe."

Clinton on Saturday brushed off Gadhafi's remarks and stepped up calls on him to quit.

"Instead of issuing threats, Gadhafi should put the well-being and the interests of his own people first and he should step down from power and help facilitate a democratic transition," Clinton told a news conference during a visit to NATO member Spain.

Spanish Foreign Minister Trinidad Jimenez, whose country was targeted by Islamist militants in simultaneous train blasts in 2004 that killed 191, said the alliance stance was unchanged.

"Spain's and the international coalition's response is to maintain the unity and determination with which we have been working these past months," she said.

Gadhafi's speech came as Libyan rebels, who had advanced to within 80 km (50 miles) of the capital were stopped in their tracks by a barrage of rocket fire from government forces, underlining the dogged resistance of Gadhafi troops to a five-month revolt.   

Coalition military officials refuse to characterise the situation on the ground as a stalemate after a 104-day bombing campaign that has strained alliance firepower and tested unity, with internal divisions over strategy surfacing.

A rebel advance from the Western Mountains to just outside the small town of Bir al-Ghanam this week had raised prospects of a breakthrough, but they have been pinned down by Gadhafi forces who on Friday attacked with Russian-made Grad rockets.