TRIPOLI, Libya — Italy formally recognized the rebel government of eastern Libya, dealing yet another blow to the beleaguered regime of Col. Moammar Gadhafi as it attempts to maneuver its way out of its worst crisis in four decades.

A government spokesman declared late Monday that the Gadhafi regime would be willing to consider a referendum and other drastic reforms so long as Gadhafi retained a leadership role before the vote. The Libyan government has also reinvigorated diplomatic efforts, dispatching a diplomat to Greece, Turkey and Malta after failing to gain a decisive victory on the battlefield against rebels in the east or emerge from international isolation.

“”He led the revolution in Libya. He has symbolic significance for the people in Libya,”” government spokesman Musa Ibrahim said. “”How Libya is governed is a different matter. What kind of political system implemented in the country is a different matter. This is negotiable. We can have anything — elections, referenda, anything. We could have any political changes, constitution, elections. But the leader has to lead this road.””

Gadhafi’s violent suppression of protests spurred by recent revolutions in Tunisia and Egypt sparked a civil war that has divided Libya into a rebel-held east and a western region largely controlled by Gadhafi loyalists. The U.N. authorized a no-fly zone and airstrikes on Gadhafi’s forces as they were about to pounce on the de facto rebel capital of Benghazi last month.

But after advancing against Gadhafi’s forces with the aid of airstrikes, the rebels were beaten back and are now locked in a stalemate at Port Brega. Rebel fighters continued to be kept at bay on the edge of the oil city that Gadhafi’s forces retook last week. Some rebel officials have acknowledged they are now trying to hold on to territory rather than mount another push on Gadhafi’s territory after being repelled last week.

Despite claims by the Libyan government that it was abiding by a cease-fire, a spokesman in the rebel-held western city of Misrata said five civilians had been killed and 24 injured Monday as a result of intense artillery barrages by Gadhafi’s forces.

With the armed conflict proving inconclusive, rebels and Gadhafi have sought to broaden their diplomatic contacts in recent days.

A Western former official with knowledge of the Libyan government, speaking on condition of anonymity, said officials in Tripoli, the capital, were desperately seeking a solution that would satisfy the West and end the foreign military effort. He said Western intelligence services had dispatched hundreds of instructors to the east to act as military advisers, finding themselves dragged deeper into a conflict with no visible end.

Rebel spokesman Mustafa Gheriani rejected outright the long-floated proposal, reported in Western media Monday, that Gadhafi’s son Seif Islam could manage the country in a transition to democracy. “”These guys have so much blood on their hands,”” Gheriani said. “”What makes you think the Libyan people will accept them?””

And questions remain about whether any proposed compromises have the approval of Gadhafi himself. Ibrahim last week rejected as “”impossible”” a modest rebel offer for a truce in exchange for refraining from attacking opposition-held cities, as demanded by a U.N. Security Council resolution, and allowing peaceful protests.

Italian Foreign Minister Franco Frattini’s announcement that Rome would open an office in rebel-held territory and formally recognize the Benghazi-based Libyan National Council as the only representative of the country stunned many Libyans. Italy once ruled Libya as a colonial ward and maintains deep cultural and economic ties.

Italian Prime Minister Silvio Berlusconi has met with Gadhafi numerous times and at one point kissed the Libyan dictator’s hands. Now, Italy joins France as the second Western country to formally recognize the rebel government.

“”Any solution for the future of Libya has a precondition”” — namely that Gadhafi and his family leave, Frattini said after meeting with opposition representative Ali Issawi in Rome.

Abdelati Obeidi, serving as Libya’s acting foreign minister, is currently on a diplomatic mission shopping proposals to halt strong U.N. sanctions and end the international bombing campaign. Greek Foreign Minister Dimitris Droutsas was quoted as saying by the official Athens News Agency, “”Judging from the emissary’s words, it seems that the regime is also searching (for) a solution.””

Frattini’s demand that Gadhafi and his family leave the country outraged officials in the Libyan capital. “”No one can have preconditions for Libyans,”” Ibrahim said. “”This is a Libyan matter…Who are you to decide what Libya should do?””

Rebel leaders in Benghazi welcomed Italy’s endorsement, calling it “”the latest show of support by a foreign state for the Libyan fight for freedom.””

Meanwhile, American warplanes continued to carry out airstrikes against Libyan units Monday after a request from NATO to extend the American combat role by 48 hours after bad weather canceled many sorties last week.

In Washington, the State Department expressed concern to the Libyan opposition about reports that al-Qaida had been capturing surface-to-air missiles and other weapons in rebel-controlled areas and moving them to neighboring Mali. Spokesman Mark Toner said the rebels had pledged to look into the U.S. concern but had not been able to confirm that the reports were accurate.