Libya’s Gaddafi: “We will beat them” (VIDEO) (UPDATES)

BENGHAZI, Libya — Western allied forces struggled to determine their strategy for their campaign in Libya as defiant leader Muammar Gaddafi appeared at his recently attacked compound in Tripoli and rallied his supporters with a fiery speech.

And Libyan rebels announced they had formed an "interim government" led by Mahmoud Jibril, best known for persuading France to recognize the rebels' transitional council as the country's sole diplomatic representative.

"We shall not surrender and we shall not fear passers by. We jeer at their missiles. These are passing missiles," he said at the Bab al-Aziziya compound, which was targeted by allied forces Sunday, as reported by the BBC.

"In the short term, we will beat them. In the long term, we will beat them."

Gaddafi's speech, carried on state television on Tuesday, accused "crusader countries" of a battle on Islam.

"Long live Islam everywhere. All Islamic armies must take part in the battle, all free [people] must take party in the battle," he added. "We will be victorious in the end."

Fighting on the ground continued Tuesday, Al Jazeera reported, saying that Gaddafi's forces were pressing ahead with assaults on the towns of Misurata, Ajdabiya and Zintan.

President Barack Obama has said the United States is days away from handing over control of the operation to its allies, but confusion remains as to the extent of the mission and the obligations and responsibilities of different countries involved.

After intense negotiations, Obama, British Prime Minister David Cameron and French President Nicolas Sarkozy agreed that NATO would play a key role in the operation to enforce a no-fly zone.

But allies rejected NATO taking political control of the operation, which instead would be handed to a separate oversight body comprising foreign ministers from participating states including Britain, France, the United States and the 22-member Arab League.

"When this transition takes place, it is not going to be our planes that are maintaining the no-fly zone. It is not going to be our ships that are necessarily enforcing the arms embargo. That's precisely what the other nations are going to do," Obama said at a news conference in El Salvador, reports the AP.

But Obama also acknowledged the difficulties of running a multilateral force that was formed quickly without clear delineation of responsibilities, the New York Times reports. The Los Angeles Times called the issue a "hot potato."

“This is complicated,” Defense Secretary Robert M. Gates said in Moscow, it states. “This command-and-control business is complicated. We haven’t done something like this, kind of on the fly before. So it’s not surprising to me that it would take a few days to get it all sorted out."

When asked how long Britain would be involved in the Libya campaign, British minister Nick Harvey said, as reported in the Independent: "How long is a piece of string? We don't know how long this is going to go on for."

Confusion over the management of the coalition comes as explosions and anti-aircraft fire rocked Libya's capital Tripoli, Al Jazeera reports.

Blasts were heard around the city and anti-aircraft fire shot through the sky Tuesday night, it states.

The strikes by allied forces have effectively created a no-fly zone across the northern part of the country, but do not appear to have given the rebels the edge needed to push back forces on the ground that are loyal to Gaddafi.

Residents in Misrata, 125 miles southeast of Tripoli, told AP that shelling and sniper attacks by Gaddafi's forces have been unrelenting.

The opposition has so far failed to drive back Gaddafi’s heavy armor, tanks and weapons encircling the strategic oil town of Ajdabiya, which lies about 100 miles south of the rebel-held stronghold of Benghazi.

On Tuesday, Gaddafi tanks and rockets repeatedly bombarded rebel positions just outside of Benghazi, a show of the leader’s fortitude as his forces continue to push toward this last-remaining base of opposition.

At one point during the fighting on Tuesday rebel soldiers sustained a direct hit to one of their makeshift ambulances. At least one man was dragged back in the bed of a pickup bleeding from the head. Two other civilians, who were shaken, were also picked up and returned to Benghazi to shouts of “Allah Akbar!”

The opposition has been unable to organize a push to advance directly toward the tank positions in Ajdabiya, which they say Gaddafi has strategically placed near civilians to protect them from allied air strikes.

Still, rebel fighters remain resolute.

“The plan is perfect for us,” said Yasser Hassel, 32, a rebel and former military soldier. “There are no air strikes today. We’re waiting for the French to strike accurately.”

But there is uncertainty in the field whether or not allied planes will strike Gaddafi’s forces if they are not on the move and not actively targeting civilians. The question might be irrelevant if the loyalist positions are so close to civilians that there would be collateral damage on a battlefield already strewn with unexploded ordnance.

The rebels claimed Tuesday that Gaddafi forces are still targeting civilians in Ajdabiya. But the reports from the town are sporadic at best, with word of emergencies that range from a lack of medical supplies to a full-blown civilian catastrophe in the town of more than 150,000 residents, occasionally reaching Benghazi.

The rebels, however, said that Gaddafi’s supply lines had been cut, and many opposition fighters said they will just wait until the leader’s tanks run out of shells. Some said there are ongoing negotiations for the loyalist forces to surrender to a civilian authority in the town.

“Air strikes have done much,” said Ibrahim Saleh, 42, a resident of Benghazi. “But we hope for more weapons and supplies. We don’t need foreign troops, we are ready to do the fighting for ourselves.”

Meanwhile, a spokesman for the new "government" stressed that its aim was to unify the country. 

Nisan Gouriani told Al Jazeera that the rebels' "position has been very clear from the beginning — that Libya is one unit."

He added: "Our capital is Tripoli and will forever be Tripoli. We are striving to liberate the western parts of the country, and Tripoli, and keep the country united. We would like to emphasise this over and over again."