UK Prime Minister David Cameron has praised Libya’s interim authority for the way it has established control over the country, but warned that the “hardest part” was still to come.
Mr Cameron and French President Nicolas Sarkozy are on a visit to Tripoli, the first by Western leaders since Col Muammar Gaddafi was ousted last month.
Mr Cameron said Col Gaddafi should give up and dismiss his mercenary fighters.
The leaders also vowed to free more frozen Libyan assets.
“The message, I think, to Gaddafi and all those holding arms on his behalf is: it is over. Give up. The mercenaries should go home,” Mr Cameron told a news conference in Tripoli.
Both he and Mr Sarkozy said Nato would continue its mission under a UN mandate to protect Libyan civilians until the last remnants of pro-Gaddafi forces were defeated.
Mr Sarkozy said Col Gaddafi remained a danger.
Britain and France were at the forefront of Nato’s operation in Libya.
Mr Cameron and Mr Sarkozy then travelled on to the former rebel stronghold of Benghazi, in the east, where they were given a rapturous reception by the crowds in the city’s Liberty Square.
“It is great to be in free Libya,” Mr Cameron said. Col Gaddafi had threatened to hunt them like rats, he said, but the Libyan people had fought like lions.
Mr Sarkozy plunged into the crowd, reaching across his bodyguards to shake the hands of waiting Libyans, many of them waving French flags.
The two leaders met National Transitional Council (NTC) leaders in Tripoli, where NTC chief Mustafa Abdul Jalil thanked them for taking “brave positions” during the Libyan uprising.
“They showed us political, economic and military support which helped the rebels establish a state, and we thank France and the UK for that,” he said.
Mr Sarkozy urged Libyans to avoid “vengeance and retaliation”, calling on them to preserve unity and seek reconciliation.
He said France’s focus was on consolidating the position of the NTC and pursuing the last remnants of the Gaddafi regime, rather than focusing on economic deals or reconstruction contracts.
Mr Cameron and Mr Sarkozy arrived in Libya earlier on Thursday and flew by helicopter to a hospital where they were greeted by crowds of cheering staff and patients.
The two leaders are hugely popular in Libya, where common graffiti slogans include: “Merci Sarkozy!” and “Thank you Britain!”
Their visit had been under consideration for several weeks, correspondents say. Initially the plan had been to wait until security had improved across Libya, but the trip was brought forward to show support for the NTC after its arrival in Tripoli at the weekend.