Libyan rebels in Benghazi has rejected a peace proposal put forth by a delegation of African Union (AU) who visited them after they conferred with Moammar Gaddafi, who earlier endorsed the plan.

Opposition leaders said that they will not honor any peace arrangement that does not provide for the immediate resignation of Gaddafi.

The AU’s delegation comprised leaders of five major African nations led by South African president Jacob Zuma.

Upon arriving in the unofficial rebel capitol of Benghazi, AU officials were greeted by angry demonstrators who moved their vehicles and shouted anti-Gaddafi slogans. They also gathered outside the hotel where the AU chiefs were staying at.

Terms of the AU plan included an immediate ceasefire between combatants in Libya, a cessation of air strikes by NATO-led coalition forces on Gaddafi’s military forces, and dialogue on political reforms, including justice, peace and security as well as socioeconomic development.

The peace proposal also called for international humanitarian aid into the country and the protection of foreign nationals in Libya.

An AU official said the notion of Gaddafi stepping down was discussed, without providing further details.

There was some discussion on this but I cannot report on this. It has to remain confidential, said AU Commissioner for Peace and Security Ramtane Lamamra. It's up to the Libyan people to choose their leaders democratically.

The United States, Britain and Italy have also declared that Gaddafi must not be part of any post-crisis government in Libya.

In addition, NATO (which is conducting a military campaign in Libya to enforce the United Nation’s no-fly zone and protect civilians) has warned that ceasefire would have to be credible and verifiable.

Anders Fogh Rasmussen, NATO’s secretary-general, has called for a complete end to violence and a complete end to all attacks against and abuses of civilians.

NATO also said it would continue air strikes on Gaddafi’s military targets – something the AU has condemned.