TRIPOLI (AFP) – Demonstrators torched British and Italian missions in Tripoli on Sunday after Libya accused NATO of trying to assassinate Moamer Kadhafi in a raid that killed one of his sons and three grandchildren.

And the port in the besieged rebel-held city of Misrata was set ablaze in a deadly bombardment by forces loyal to the Libyan strongman, witnesses said.

Libyan government spokesman Mussa Ibrahim told reporters in Tripoli that the house of Kadhafi's second-youngest son, Seif al-Arab, "was attacked tonight with full power.

"The attack resulted in the martyrdom of brother Seif al-Arab Moamer Kadhafi, 29 years old, and three of the leader's grandchildren," all of whose parents were siblings of Seif.

NATO said it kept up precision raids on military installations in Tripoli on Saturday night, "including striking a known command-and-control building in the Bab al-Aziziya neighbourhood shortly after 1800 GMT."

Kadhafi and his wife were in the building with his son but were not harmed, Ibrahim said, calling the strike "a direct operation to assassinate the leader of this country."

"The leader himself is in good health; he wasn't harmed. His wife is also in good health; she wasn't harmed, (but) other people were injured," the spokesman added.

Ibrahim later said intelligence on Kadhafi's whereabouts appeared to have been "leaked."

"They knew about him being there, or expected him for some reason."

He said funerals would be held on Monday for Seif al-Arab and for the three infants killed -- a boy and a girl, both aged two, and a baby girl of four months.

Hours after the attack, angry demonstrators set fire to the Italian embassy and the residences of the Italian and British ambassadors in Tripoli, an AFP correspondent said, adding no one was in the buildings at the time.

In the afternoon, smoke could still be seen rising from the buildings, located in the same street as Libyan state television.

Rome and London both confirmed their missions had been targeted, and British Foreign Secretary William Hague announced the expulsion of the Libyan ambassador in response.

In London, Hague said: "I condemn the attacks on the British embassy premises in Tripoli as well as the diplomatic missions of other countries."

"The Vienna Convention requires the Kadhafi regime to protect diplomatic missions in Tripoli. By failing to do so that regime has once again breached its international responsibilities and obligations.

The Italian foreign minister denounced what it called "grave and vile actions."

Britain had recalled its envoy to Tripoli at the start of the conflict in February, and Italy shut down its mission in March.

Earlier Sunday, Italian Interior Minister Roberto Maroni said Kadhafi's threat a day earlier to "bring the battle to Italy" should not be underestimated, but Foreign Minister Franco Frattini said the threats had "nothing credible" about them.

In New York, a United Nations spokeswoman said that organisation was going to pull its staff out of Tripoli, "given the unrest" there.

The UN also has staff in the rebel bastion of Benghazi in eastern Libya and elsewhere as it seeks to stave off a humanitarian disaster with tens of thousands of Libyan refugees fleeing the conflict to neighbouring countries.

British Prime Minister David Cameron called NATO's targeting policy "in line" with the UN resolution authorising the Libya campaign with the declared aim of protecting civilians.

But Russia called for an immediate ceasefire and said it had "serious doubts" the West was not targeting Kadhafi and his family.

Libyan state TV showed flag-waving demonstrators it said were mourning Seif al-Arab's death.

The Roman Catholic Bishop of Tripoli, Giovanni Martinelli, later confirmed to an Italian television that Seif al-Arab had been killed.

He appealed to NATO, the United Nations and the world community to end the bombing of Libya. "I ask, please, out of respect for the pain due to the loss of a son, a gesture of humanity towards the leader," he said.

On a guided visit on Sunday, Ibrahim showed journalists a heavily damaged house in the Gharghour area where the attack took place.

The North Atlantic Treaty Organisation vowed more strikes, although the commander of Operation Unified Protector stressed in a statement that "we do not target individuals."

"All NATO's targets are military in nature and have been clearly linked to the ... regime's systematic attacks on the Libyan population and populated areas," said Lieutenant General Charles Bouchard.

He said the raids would carry on until all attacks and threats against civilians ceased and all of Kadhafi's forces, "including his snipers, mercenaries and paramilitary forces have verifiably withdrawn to their bases, and until there is full, free and unhindered access to humanitarian aid to all those in Libya who need it."

In Misrata, which Kadhafi's forces have been trying to retake for nearly two months, the port was in flames on Sunday after heavy bombardment which killed at least two people, witnesses said.

Earlier the same day a salvo of rockets had hit the city, and an AFP correspondent said two rebels were killed and five wounded when a mortar round hit a house on the outskirts of Misrata.

Later, dozens of rockets struck the port, especially the main entrance, guarded by rebels, residents and journalists said, and two more rebels had died.

Explosions could also be heard apparently coming from the area of the airport, which rebels have spent several days seeking to capture from Kadhafi troops.

The shelling later appeared to have stopped before midnight.

Hundreds of African refugees were still gathered at a tent camp next to the port hoping for evacuation.

The International Organisation for Migration said a boat carrying 180 tonnes of humanitarian aid and planning to evacuate 900 people was anchored offshore waiting for clearance to enter the harbour and collect them.

The IOM's Roberto Pitea said "the security situation is not good so there are no plans right now for the ship to go in (to port)."

On Saturday, Kadhafi had said NATO "must abandon all hope of his departure," adding that he would "not leave my country and will fight to the death."

But the veteran leader also proposed talks with France and the United States, without preconditions, an offer that was rejected by NATO and the rebels. "We will not surrender, but I call on you to negotiate," he said.

A top rebel leader, Abdul Hafiz Ghoga, responded by saying "the time for compromise has passed. "The people of Libya cannot possibly envisage or accept a future Libya in which Kadhafi's regime plays any role."