Abdel-Rahman Busin, a military spokesman in Tripoli, also said revolutionary forces knew Gadhafi's son, Seif al-Islam, was in the regime stronghold of Bani Walid two weeks ago because they held negotiations about his possible surrender. But he said the talks had broken down and it was not known if he was still in the town.
Revolutionary forces gained control of Tripoli and much of the rest of the North African nation late last month, but the longtime leader fled and has been trying to rally supporters from hiding as fighting continues on three fronts. His sons also escaped and there have been several unconfirmed reports about their whereabouts.
Military officials fear Gadhafi may still be able to stoke violence from his hiding place.Busin said the military has intelligence that Gadhafi is hiding in the vast southern desert with help from Tuareg fighters. Ethnic Tuaregs, whose nomadic community spans the desert border of Niger, Mali, Libya, Algeria and Chad, are among Gadhafi's strongest remaining supporters.
"We do believe that he is somewhere in that region and we do know that Tuaregs are supporting him, probably because he's paying them," Busin said.
He did not offer evidence and acknowledged the military cannot confirm anything.
"It's a very large bit of land to cover. We don't have the people to cover it all and he could move around quite freely," Busin told The Associated Press.
One report suggested Gadhafi was southwest of the desert town of Sabha, Busin said. He also said a recent attack on the border town of Ghadamis raised suspicion that the fugitive leader was hiding in the surrounding region, a vast area near the Algerian frontier. "Possibly they were just creating a diversion," he said.
Pro-Gadhafi gunmen crossed the border from Algeria to attack revolutionary forces in Ghadamis last week, killing at least nine people, local officials said.
Ali al-Mana, the Ghadamis representative on the National Transitional Council, said there was no confirmation that Gadhafi was in the city.
Many Libyans believe Ghadafi's son and other regime members are hiding in Bani Walid, 90 miles (140 kilometers) southeast of Tripoli, where revolutionary fighters have been stalemated with loyalist fighters for weeks.