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A Nato air strike in the Libyan capital, Tripoli, has killed the son of Colonel Muammar Gaddafi, a government spokesman has said.
Colonel Gaddafi himself was in the large residential villa which was hit by the strike, the spokesman added, but was unharmed.
His son Saif al-Arab was said to be dead, as well as three grandchildren.
Nato has confirmed the air strike, without denying or confirming the reported deaths.
A Nato spokesman said the strike had hit a "known command and control building in the Bab al-Azizya neighbourhood".
"All Nato's targets are military in nature... We do not target individuals," said Lieutenant-General Charles Bouchard.
He said that he was aware of reports that members of Col Gaddafi's family had been killed, but made no further comment.
"We regret all loss of life, especially the innocent civilians being harmed as a result of the ongoing conflict," said Lt-Gen Charles Bouchard.
'Direct operation'
Journalists takent to the site of the air strike in Tripoli said the building was extensively damaged and one unexploded bomb remains at the site.
Saif al-Arab, who had a lower profile than his brother Saif al-Islam, had been studying in Germany and returned to Libya recently.
Government spokesman Moussa Ibrahim said the villa in which he was killed was attacked "with full power".
"The attack resulted in the martyrdom of brother Saif al-Arab Muammar Gaddafi, 29 years old, and three of the leader's grandchildren," he said.
"The leader with his wife was there in the house with other friends and relatives, the leader himself is in good health, he wasn't harmed." Col Gaddafi's wife was also unharmed, he said.
"This was a direct operation to assassinate the leader of this country," the spokesman added.
There has been no independent confirmation of the deaths.
'Law of the jungle'
Libyan rebels began a campaign in mid-February to end more than four decades of rule by Col Gaddafi.
Since last month they have been aided by an international coalition acting on a UN mandate to protect Libyan civilians.
Mr Ibrahim said the attack late on Saturday was against international law.
"We ask the world to look into this carefully because what we have now is the law of the jungle," he said.
"How is this helping in the protection of civilians? Mr Saif al-Arab was a civilian, a student... He was playing and talking to his father and mother and his nieces and nephews and other visitors when he was attacked and killed for no crime he committed."
An adopted daughter of Col Gaddafi's was killed in 1986 by a US air strike launched in response to alleged Libyan involvement in the bombing of a Berlin disco frequented by US military personnel.
Mr Ibrahim accused the international coalition conducting air strikes over Libya of not wanting peace.
"We have again and again declared that we are ready for negotiation, ready for road maps for peace, ready for political transitional periods, ready for elections, ready for a referendum.
"Nato does not care to test our promises. The West does not care to test our statements. They only care to rob us of our freedom, our wealth, which is oil, and our right to decide out future as Libyans."
Gunfire rang out in celebration in the eastern rebel stronghold of Benghazi following the news that Saif al-Arab Gaddafi had been killed.
'Violating human rights'
The strike that Libya said had killed Saif al-Arab Gaddafi came less than a day after a speech by his father was broadcast on state TV, in which Col Gaddafi called for a ceasefire and negotiations.
During his speech the Libyan government reported a Nato air attack on a complex that includes the state TV building, which it said was also designed to kill Col Gaddafi.
Several air strikes against Col Gaddafi's sprawling Bab al-Aziziya compound have been reported recently.
Earlier this week, US Defence Secretary Robert Gates told reporters that Libyan government command and control centres were "legitimate" targets, although Nato was not targeting Col Gaddafi specifically.
On Saturday, Nato officials said the alliance would not consider talks until government forces stopped attacks on civilians.
The vice-chairman of the Transitional National Council also rejected the offer of negotiations, saying the Libyan leader had "offered ceasefires only to continue violating basic human rights, international humanitarian law, and the safety and security of Libya and the entire region".
Source:BBC
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