Libya declared Friday an immediate ceasefire in the month-long battle against rebels fighting to overthrow strongman Moammar Gadhafi, but the insurgents dismissed it as a bluff and Washington demanded action, not words.

More than four hours after the announcement, rebels said they were still being attacked by Gadhafi loyalists, a claim Tripoli denied.

A son of Libya Moammar Gadhafi on Friday said his family was "not afraid" after the United Nations approved air strikes against forces loyal to his father's regime.

"We are in our country and with our people. And we are not afraid," Seif al-Islam Gadhafi told ABC News Nightline from the Libyan capital Tripoli.

Hizbullah leader Sayyed Hassan Nasrallah will make a speech during a ceremony scheduled to be held on Saturday in support for uprisings in Arab countries, the party’s media office announced.

The statement said late Thursday that Nasrallah will address supporters during the ceremony aimed at sending a message of support for the people of Tunisia, Egypt, Bahrain, Libya and Yemen.

A senior U.S. official warned Thursday there was a "very real danger" that Libyan leader Moammar Gadhafi could return to terrorism if he is allowed to consolidate his control over the fractured nation.

There is "a very real danger that if Gadhafi is successful on the ground, that you also face a number of considerable risks as well, the dangers of him returning to terrorism and violent extremism himself," under secretary of state for political affairs William Burns told U.S. senators.

NATO's chief urged the U.N. on Thursday to quickly act on Libya to stop Moammar Gadhafi from crushing rebels, but the alliance was divided even as it pressed ahead with plans for a no-fly zone.

"If Gadhafi prevails it will send a clear signal that violence pays. That would be unacceptable from a humanitarian and democratic perspective," Secretary General Anders Fogh Rasmussen said.

The Libyan army announced that it would halt military operations from Sunday to give rebels the chance to lay down their arms and benefit from an amnesty, state news agency Jana reported Thursday.

"The provisional general committee (ministry) of defense has decided to halt military operations against the armed terrorist bands from midnight on Sunday (2200 GMT) ... to give (them) a chance to lay down their arms and benefit from a general amnesty," Jana said.

Libyan leader Moammar Gadhafi's son on Wednesday told "this clown" French President Nicolas Sarkozy to "give us back our money" allegedly used to finance his 2007 election victory.

Seif al-Islam told Euronews that "we have all the details and are ready to reveal everything" as Gadhafi's forces closed in on rebels in the eastern city of Benghazi who France recognized as Libya's legitimate representatives.

Oil prices rose to above $98 a barrel Wednesday in Asia as fears that clashes in Bahrain and Libya could further disrupt crude supplies outweighed concern Japan's disaster will crimp demand.

Benchmark crude for April delivery was up 97 cents at $98.15 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.

Several Arab nations are prepared to take part in a military operation in Libya to stop the advance of leader Moammar Gadhafi's forces, French Foreign Minister Alain Juppe wrote on his blog on Wednesday.

"Only the threat of force can stop Gadhafi. It is by bombarding, with the few dozen planes and helicopters he really has, his opponents' positions that the Libyan dictator has turned the balance.

Libyan leader Moammar Gadhafi said the rebellion against his rule was a "lost cause", in an interview published on Tuesday, adding that he felt "betrayed" by former ally Prime Minister Silvio Berlusconi.

The rebels "have no hope, it's now a lost cause for them," Gadhafi said in an interview with Italian daily Il Giornale, as his forces made major advances on the ground into formerly rebel-held territory in eastern Libya.