Anti-Gaddafi forces claim they have surrounded the former Libyan dictator as footage emerged of him enjoying happier times with his granddaughter.
A spokesman for Tripoli's new military council said it was only a matter of time until he was captured or killed.
Anis Sharif said Colonel Muammar Gaddafi was still in Libya and had been tracked using advanced technology and human intelligence.
Rebel forces have taken up positions on all sides of his presumed location, with none more than 40 miles away, he claimed.
But the deputy defence minister, Mohammad Taynaz, said the fugitive leader could still be hiding in tunnels under Tripoli. However, the manhunt was not a focus for his men.
"Our priority is to liberate all of Libya," he said.
"Once the country is free, there will be nowhere for him to hide in Libya."
It comes as the government of neighbouring Niger said Col Gaddafi had not fled to that country.
Earlier reports suggested he may have been in a village some 190 miles away from Niger just days ago.
Officials in Niger have said 13 Libyans had crossed the border in a convoy, but they did not include the former leader.
The government said it was welcoming the group on "humanitarian grounds" in the interests of Niger and "in regular consulation" with the Libya's new National Transitional Council (NTC).
But the government statement did not identify any of the Libyans, although there are reports some of the former regime's top officials, including security chief Mansour Daw, were among them.
Meanwhile, a video from the Gaddafi family archive has emerged, showing the leader playing with his granddaughter, and with his son Saadi and his family.
Sky's Lisa Holland, who is in Tripoli, said the whereabouts of Col Gaddafi and some close members of his inner circle was still unclear - with senior officials giving conflicting reports of where he might be.
But Saif al Islam, Col Gaddafi's most prominent son, is said to be still in besieged Bani Walid, southeast of Tripoli.
Anti-Gaddafi troops are preparing to use force to enter the town, one of the colonel's last remaining strongholds, after talks with tribal elders broke down.
The NTC had been in negotiations for a peaceful handover of Bani Walid, currently occupied by armed Gaddafi loyalists.
But now it has warned that the town could be invaded by rebel forces as soon as Friday - raising the threat of more bloodshed.
The NTC has given areas loyal to Col Gaddafi, including Jufra, Sabha and the former Libyan leader's birthplace in Sirte, just a few days to surrender and avoid violence.
Nato has confirmed statements from the NTC that the alliance is not assisting in the search for Col Gaddafi.