TRIPOLI: Libyan leader Muammar Gaddafi is willing to hold elections and step aside if he lost, his son said, an offer quickly dismissed Thursday by rebels and the United States. Gaddafi's son Saif Al-Islam told Italian newspaper Corriere della Sera: “They (elections) could be held within three months. At the maximum by the end of the year, and the guarantee of transparency could be the presence of international observers.” He said his father would be ready to step aside if he lost the election, though he would not go into exile. Prime Minister Al-Baghdadi Ali Al-Mahmoudi later appeared to put the potential concession in question, telling reporters: “I would like to correct (that) and say that the leader of the revolution is not concerned by any referendum.” He added that there was no reason for the Libyan leader to step down in any case, because he had not held any formal political or administrative post since 1977. A visiting Russian envoy said Al-Mahmoudi had told him Gaddafi would not leave power. The rebel leadership in the eastern stronghold of Benghazi dismissed Gaddafi's son's election offer as “wasting our time”. “Saif Al-Islam is not in a position to offer elections. Libya will have free elections and democracy but the Gaddafi family has no role to play in this process,” Jalal El-Gallal, a rebel spokesman, told Reuters. “These people are criminals, they have utter disregard for human life. They have to withdraw troops from our cities, allow humanitarian aid to reach people, they will face justice for their crimes. Only then we can talk about holding elections.” A US State Department spokesperson also dismissed the election proposal, saying it was “a little late for that”. The Russian envoy, Mikhail Margelov, said after talks with Mahmoudi that the issue of Gaddafi's departure from power was a “red line” the Libyan leadership was not willing to cross. He said his task was to soften that position through negotiation. “I can say that today I am a cautious optimist regarding the resolution of the Libyan crisis,” he said. Late last month Moscow joined the West in calling for Gaddafi to step down, a major diplomatic setback for the leader. ‘Gaddafi in talks with rebels' Margelov also said Gaddafi's regime is in direct talks with Libya's rebels. “I was assured at today's negotiations that direct contacts between Benghazi and Tripoli are already under way,” Margelov said, quoted by Russia's ITAR-TASS news agency. “The Libyan prime minister told me that a round of such contacts concluded yesterday in Paris,” he said, adding French President Nicolas “Sarkozy has been informed of the outcome of these contacts.” Meanwhile, NATO officials have said they may not have the resources for a sustained campaign, and Republicans in the US Congress have questioned the legal grounds for continued US involvement. Adding to the pressure on NATO, Russia and China issued a joint declaration underlining their concerns about the airstrikes. The declaration was signed in Moscow by Russian President Dmitry Medvedev and Chinese President Hu Jintao. “To avoid further escalation of the violence it is necessary to provide for the meticulous adherence by all sides involved” to UN resolutions on Libya, the document said.