South African President Jacob Zuma says the Libyan government has accepted an African Union peace proposal to end the eight-week-old conflict.
Mr Zuma's AU delegation met Libyan leader Col Muammar Gaddafi in Tripoli on Sunday. An AU team is going to the eastern rebel stronghold of Benghazi.
But rebel spokesmen said there could be no truce unless Col Gaddafi stepped down and his forces withdrew.
In Ajdabiya, pro-Gaddafi forces have pushed back rebels in fierce fighting.
Nato says its planes destroyed 25 government tanks on Sunday alone.
The alliance said it had "taken note" of the AU initiative and welcomed efforts to save Libyan civilians.
The AU deal's main points are:
- An immediate ceasefire
- The unhindered delivery of humanitarian aid
- Protection of foreign nationals
- A dialogue between the government and rebels on a political settlement
- The suspension of Nato airstrikes
"The brother leader [Col Gaddafi] delegation has accepted the roadmap as presented by us," Mr Zuma declared.
"We have to give the ceasefire a chance," he said, after several hours of talks.
In all, the AU mission comprised representatives from five nations: presidents Jacob Zuma of South Africa, Mohamed Ould Abdel Aziz of Mauritania, Amadou Toumani Toure of Mali and Denis Sassou Nguesso of Congo-Brazzaville, and Uganda's Foreign Minister Henry Oryem Okello.
The five-strong panel was approved by the European Union.
Welcoming the AU initiative, Nato spokeswoman Oana Lungescu said the alliance had "always made it clear that there could be no purely military solution to this crisis".
"We welcome all contributions to the broad international effort aimed at stopping the violence against the civilian population in Libya."
Mr Zuma is now returning to South Africa. His foreign minister and the other AU heads of state are travelling on to Benghazi.
Rebel spokesman Mustafa Gheriani told Reuters the proposal would be considered, but "the Libyan people have made it very clear that Gaddafi must step down".
Another spokesman, Shamsiddin Abdulmolah, told AFP news agency: "The people must be allowed to go into the streets to express their opinion and the soldiers must return to their barracks."
"The world has seen these offers of ceasefires before and within 15 minutes [Col Gaddafi] starts shooting again," he added.
The British-based representative of the Libyan opposition leadership, Guma al-Gamaty, has told the BBC that any deal designed to keep Col Gaddafi or his sons in place would not be acceptable.
The BBC's Jon Leyne in Benghazi says the opposition will be very uneasy that they are in danger of being outmanoeuvred by this delegation, which they will see as being very sympathetic to Col Gaddafi.
An AU official said the idea of Col Gaddafi stepping down had been discussed, but gave no further details.
"There was some discussion on this but I cannot report on this. It has to remain confidential," said AU Commissioner for Peace and Security Ramtane Lamamra.
"It's up to the Libyan people to choose their leaders democratically."
Nato air strikes have been continuing: the alliance says its planes destroyed 25 government tanks on Sunday alone.
Eleven were reportedly destroyed as they approached Ajdabiya and 14 were destroyed earlier near Misrata, the only city in western Libya still in rebel hands.
Accusing government forces of "brutally shelling" civilian areas, Nato said it was responding to a desperate situation in the two towns, under its UN mandate to protect civilians.
It was one of the biggest series of air strikes since the coalition's initial onslaught, our correspondent says.
Heavy gunfire and loud explosions were heard in the town on Sunday, with reports of intense shelling of the town from the west, from where pro-Gaddafi forces are attacking.
Ajdabiya is important to the opposition as it controls a strategic crossroads and is the last town before the main rebel city of Benghazi.
Our correspondent says the rebels reported capturing Algerian mercenaries from Col Gaddafi's forces, though this cannot be independently verified.
Libyan Deputy Foreign Minister Khaled Kaim said government forces had shot down two rebel helicopters in the east but this also cannot be confirmed.
He said: "A clear violation was committed by the rebels to [UN] resolution 1973 relating to the no-fly zone."
Speaking in Brussels, the commander of the Nato operation, Lt Gen Charles Bouchard, said that air strikes were also targeting government ammunition bunkers and lines of communication.
He cited as "an example of Nato impartiality" a report that a MiG 23 jet flown by rebel forces had been intercepted and forced to land within minutes of taking off from Benina Airfield near Benghazi on Saturday.