BENGHAZI, Libya (Reuters) - Forces loyal to Muammar Gaddafi shelled the besieged town of Misrata on Monday after the African Union said he had accepted a plan to end Libya's civil war.
Al Jazeera television quoted a rebel spokesman as saying five people died and 20 were wounded in Misrata, a lone rebel bastion in western Libya, which has been under siege for more than six weeks.
Rebels in Misrata told Reuters Gaddafi's forces fired Russian-made Grad rockets into the city, where conditions for civilians are said to be desperate.
The insurgents said they would accept no plan that allowed Gaddafi to stay in power and prepared to advance on the eastern front after repelling a major government assault on Sunday against their town of Ajdabiyah.
Prospects for a ceasefire looked remote.
South African President Jacob Zuma, head of an AU peace mission, said early on Monday that Gaddafi had accepted a peace "road map," including a ceasefire, after talks in Tripoli.
A spokesman in the rebel capital of Benghazi said the opposition would look at the plan but Gaddafi must end his 41-year rule.
"The Libyan people have made it very clear that Gaddafi must step down, but we will consider the proposal once we have more details, and respond," spokesman Mustafa Gheriani told Reuters.
Libyan officials have repeatedly said that Gaddafi, who holds no official state position, will not quit.
The AU delegation went to Benghazi to confer with rebel leaders on Monday and was met by more than 2,000 demonstrators holding banners reading: "African Union take Gaddafi with you" and "Gaddafi has committed genocide."
NO LET-UP IN NATO ATTACKS
Officials from NATO, which is bombing Libyan government armor under a United Nations mandate to protect civilians, said they took note of the AU proposal but the alliance would continue operations while civilians were at risk.
"It does not appear that this indication of a peace deal has any substance at this point," said one NATO official in reference to the shelling of Misrata.
The African Union does not have a good track record in brokering peace deals, having failed recently to end conflict or disputes in Somalia, Madagascar and Ivory Coast.
"The issue of Gaddafi stepping down from any political position is a closed issue ... Muammar Gaddafi does not hold a position of power," Abdel Monem al-Lamoushi, a government spokesman, told Al Arabiya television.
"No one has the right to send Muammar Gaddafi into exile out of the land of his forefathers. This man will not leave Libya."
At the front outside the eastern rebel town of Ajdabiyah, rebels buried the charred bodies of Gaddafi troops killed in air strikes and said they had been ordered to wait until noon to advance because new NATO bombing was expected.
Gheriani expressed surprise that Zuma did not travel to Benghazi with the four other African heads of state. Zuma said he had urgent business elsewhere.
NATO, which has denounced attacks by Libya's forces on civilian areas, said only that it took note of the AU proposal.
The alliance stepped up attacks on Gaddafi's armor over the weekend, destroying 25 tanks around Misrata and Ajdabiyah.
NO DISCUSSION ON GADDAFI
An African Union statement after the Tripoli talks made no mention of Gaddafi's future. Asked if the issue of him stepping aside was discussed, Ramtane Lamamra, AU Commissioner for Peace and Security, told reporters: "There was some discussion."
However he added: "I cannot report on confidential discussions because first of all I was not part of them."
The AU proposal included an immediate cessation of hostilities, effective monitoring of the ceasefire, the delivery of humanitarian aid and the protection of foreigners.
Asked if he feared rebels might reject the plan, Lamamra said: "We believe what we have proposed is broad enough to launch negotiations ... What we need is for them to accept that we are people of good will."
The rebels have previously rejected a negotiated outcome to what has become the bloodiest in a series of pro-democracy revolts across the Arab world that have ousted the autocratic leaders of Tunisia and Egypt.
NATO said it had increased the tempo of its air operations over the weekend, after rebels accused it of responding too slowly to government attacks.
The NATO attacks outside Ajdabiyah on Sunday helped break the biggest assault by Gaddafi's forces on the eastern front for at least a week. The town is the gateway to the rebel stronghold of Benghazi 150 km (90 miles) north up the Mediterranean coast.
On Monday rebels were putting burned and mangled bodies into blankets by blackened government vehicles outside Ajdabiyah and dragging them into the desert for burial.
"We have been able to advance because of the air strikes," said rebel Belgassim El-Awami. It was not clear how far west the rebels had moved along a front which has swung back and forth for more than a week in a fight for the oil port of Brega.
(Additional reporting by Alex Dziadosz in Ajdabiyah, Mariam Karouny in Beirut, Richard Lough in Rabat, Christian Lowe in Algiers, Foo Yun Chee in Brussels and Karolina Tagaris in London; writing by Barry Moody; editing by Giles Elgood)