Gaddafi vows he will never surrender and rails against 'crusade on Islam'

Just as the world had started to wonder why the Libyan leader had not been seen in a week, Muammar Gaddafi appeared on the balcony of his encampment near Tripoli and made a defiant speech to his supporters, saying that Western intervention in his country was "unjust" and would be defeated in the end.

Appearing on Libyan state television and displaying the same fiery temperament that has become a signature trademark of his recent addresses, the Libyan leader denounced the coalition's bombing attacks, saying that the country would "never surrender" and that they would be beaten whether in the "long or short term".

The three-minute broadcast – brief by Colonel Gaddafi's usual standards – beamed onto Libyan television screens and filtered out across the world as a fourth night of anti-aircraft fire lit up the night skies in Tripoli.

Regime figures in Tripoli had until now kept tight-lipped about his whereabouts, fuelling speculation that he had fled, while his appearances on state television had become sporadic since 22 February, when he was seen outside a ruined building in Tripoli, sheltering under a huge umbrella and denouncing reports that he had fled to Venezuela.

Last night, it was not clear whether the latest broadcast was filmed live, though foreign reporters in Tripoli were told that the speech was delivered from the residential compound in Bab Al-Aziziya, the same one that was hit by a cruise missile on Sunday night.

Dressed in black and clutching a microphone, Col Gaddafi branded his enemies "crazed fascists" and called for "all Islamic armies" to join him. He described the West's attacks as the "new crusader battle launched by crusader countries on Islam".

He added: "There are demonstrations everywhere against this unjustified assault, which breaches the United Nations' charter... This assault... is by a bunch of fascists who will end up in the dustbin of history."

His speech was signed off by a series of fireworks in the Libyan capital. Crowds of supporters cheered – some waving their flags in defiance and others shooting bullets into the air in celebration.

The appearance caught many of his critics by surprise, but the US was keen to play the incident down. Secretary of State, Hillary Clinton, went on record to ABC News, saying that Col Gaddafi could be exploring "exile options".

"Some of it is theatre," Ms Clinton told ABC News in an interview, saying the United States was aware of people reaching out, "allegedly on Gaddafi's behalf", to try to assess their options.

"A lot of it is just the way he behaves – it's somewhat unpredictable," Ms Clinton added. "But some of it, we think, is exploring. You know: what are my options? Where could I go? What could I do. And we would encourage that." But this latest display of bravado on state television at such a crucial moment for allied operations, suggested that exile was the last thing on the Libyan leader's mind.

"I am staying here, my home is here," he said defiantly. "I am staying in my tent."