Opposition forces in Chad have denied that they are observing a ceasefire with government troops after a day of fighting in the capital Ndjamena.

The official Libyan news agency, JANA, said on Saturday that the opposition forces had agreed to a ceasefire and negotiations with the government after mediation by Muammar Gaddafi, Libya's leader.

"The leader and brother [Gaddafi] had a telephone call with Mahamat Nouri, one of the leaders of the insurgency in Chad, and it was agreed ... to cease fire and to hold negotiations to implement the Tripoli agreement for peace and reconciliation," the agency said on its website.

But the opposition forces spokesman, Henchi Ordjo, told Reuters news agency that the fighters were simply holding back an assault on the palace to allow Idriss Deby, the Chadian president, the opportunity to leave.

"No ceasefire has been agreed," Ordjo said.

Battle in capital

Colonel Thierry Burkhard, a French military spokesman, said "rebels" gathered outside Ndjamena overnight before 1,000 to 1,500 fighters entered early on Saturday and spread through the city.

Haru Mutasa, Al Jazeera's correspondent in Ndjamena, said on Saturday that there had been fierce fighting close to a hotel housing expatriates, which is under guard by French troops.

She said the opposition forces had tried to advance to the presidential palace, but met resistance from Chadian troops.

"Most people are staying in their homes. They are scared and feel that there is no-one looking after them," she said.

There has been no official confirmation about the whereabouts of Deby, but two of his ministers said he remained inside the palace complex at the head of loyal troops.

Mahamat Ali Abdallah Nassour, minister of state in Deby's government, told Radio France International (RFI) that Chad's security forces were "in control in the capital".

Nassour and Ahmat Allam-mi, Chad's foreign minister, said Deby was still directing government forces from the presidency.

 French perspective

A French air force plane began evacuating several hundred French and other foreign nationals to Gabon, an official at the French military base in Ndjamena said.

The US embassy said its non-essential staff and family members would also be evacuated.

 Herve Morin, French defence minister, said France, Chad's former colonial power, which has been accused by the opposition of propping up Deby, would remain "neutral" in the conflict in the oil-producing central African state.

But Bernard Kouchner, the French foreign minister, condemned what he called "a brutal attack against an elected and legitimate president".

He called for a ceasefire and negotiations.

The US and African Union also condemned the attack on Ndjamena.

The AU threatened to eject Chad from the 53-nation body if the opposition alliance took power.

The opposition forces allegedly met little resistance as they advanced across the country from the eastern border with Sudan's Darfur region.

Chad says "the rebels are armed and backed by the Sudanese government." Khartoum denies such accusations.

A Chadian opposition web site, Alwihda, said civilians were fleeing the capital towards the border with Cameroon in the south.

Diplomats and residents said it was difficult to tell who controlled the city, where outbreaks of looting were reported.

"We're watching the ebb and flow of battle," one diplomat said, adding army soldiers and opposition forces on foot and in vehicles were moving around the capital.

 EU deployment

 This week's fighting delayed the deployment of a European Union peacekeeping force, Eufor, to eastern Chad.

The leaders of the Chadian rebels include Timane Erdimi, a former member of Deby's ruling clan, and Mahamat Nouri, a former defence minister.

They are among several high-level officials who have defected to the opposition fighters in recent years, accusing Deby of ruling like a dictator and favouring his family and friends.

Deby was widely criticised after he changed the constitution in 2006 to enable him to hold the presidency for a third term.

In October, four Chadian opposition groups initialled a peace agreement with the government in a deal brokered by Libya.

Gaddafi and Denis Sassou-Nguesso, Congo's president, have been asked to monitor the situation in the landlocked country, according to the AU.

PHOTO CAPTION

Chadian soldiers

 Al-Jazeera