By William Maclean, Security Correspondent
LONDON (Reuters) - Military pressure alone may not end Libya's war, but neither is diplomacy proving to be the fast track to peace that impatient Western powers had hoped.
Ineptly deployed, it may even put a brake on the deal-making a resolution will almost certainly require, analysts say.
Just how slippery the political track has become for the West emerged on Wednesday, when France, a leading nation in the coalition attacking Gaddafi's forces, said the Libyan leader could remain in the country if he relinquished power.
The idea floated by Foreign Minister Alain Juppe will be anathema to many in the rebel opposition who insist Gaddafi not only end his 41-year-old rule but also leave the country.
The notion also looks at odds with a Gaddafi arrest warrant issued by The Hague court for crimes against humanity allegedly committed by state forces against civilian demonstrators.
Perhaps most starkly of all, Juppe's remark shows how far Gaddafi's resilience has diluted Western ambitions five months after the start of an anti-government revolt and four months after NATO began air strikes.
Then, back on February 24, Juppe, echoing the aspirations of officials in many Western states, said: "I hope wholeheartedly Gaddafi is living his last moments as leader."
The more modest the West's expectations, the better the deal Gaddafi may eventually be able to strike.
Foreign powers are eager for a rapid end to hostilities, because they want the oil-exporting nation of 6 million to emerge as a stable democracy rather than fall prey to ethnic or tribal conflict, or become a haven for Islamist militants -- both outcomes a prolonged conflict might produce.
But the remarks by Juppe, the first senior Western official to express the Gaddafi-can-stay option in such a direct manner, will "give great comfort" to the leader, said Jon Marks, a veteran Libya watcher and chairman of Cross Border Information, a UK-based consultancy.
It would encourage the Colonel in a belief that he can widen rifts within the international community by stringing out talks with Western powers on a potential exit strategy, he said.
GADDAFI THREATENED EUROPE
Opposition activist and journalist Ashour Shamis said it was impossible to imagine Gaddafi, a proven survivor who ruled for years under sanctions, remaining in Libya in retirement "keeping quiet and not making trouble."
"In his mind he is Libya and therefore has the natural right to intervene. So this idea of Gaddafi staying in the country undermines the whole project (or reaching a workable solution)."
"It will create more problems than it solves."
Western officials have said they are receiving continual approaches by Libyan officials expressing contradictory messages on how to bring peace to the country. Some indicate a willingness to step down and help with transitional elections.
But on the record, Gaddafi appears defiant. Earlier this month he even threatened to take the war to Europe.
His foreign minister, Abdelati Obeidi, said on Wednesday that the government was not in any discussions about Gaddafi's potential departure from power.
As a result of the mixed messages, no one appears sure whether Gaddafi intends to fight in hope of keeping his grip on the territory around Tripoli or seek an exit strategy that guarantees security for himself and his family.
NOOSE "CONTINUES TO TIGHTEN"
Gaddafi is under huge pressure from dwindling fuel supplies and a broadening network of diplomatic acceptance of the rebels, notably Washington's July 15 recognition of the Benghazi-based National Transitional Council as Libya's government.
"The colonel's best hope of survival is for a large-scale fallout between NATO members and a scaling back or cessation of air strikes," a briefing by risk analysis firm Maplecroft said.
"This, however, is unlikely to occur in the near term. As such, the noose continues to tighten around Gaddafi."
But Oliver Miles, a former British ambassador to Libya, said behind-the-scenes contacts had clearly not clinched agreement about Gaddafi's evident desire to stay in Libya. "There's no real indication that that difference has been bridged yet."
Some analysts say Gaddafi is not likely to embrace the notion of asylum in a third country, even if the U.N. Security Council voted to give him immunity from prosecution.
Uppermost in the minds of Gaddafi's aides, Miles said, was the case of former Liberian President Charles Taylor, who was arrested in March 2006 for crimes committed in Sierra Leone's 1991-2002 civil war.
Taylor was in exile in Nigeria from 2003 until March 2006, when he briefly disappeared before Nigerian police arrested him at a remote border post as he tried to flee into Cameroon.
"The version of the Charles Taylor story that seems to be believed in Libya is that he was given assurances of asylum by the Nigerians and they welshed on this and handed him over to the court," Miles said.
"That must be in anyone's mind if they are thinking in terms of asylum in Africa."
(Additional reporting by David Brunnstrom in Brussels, Peter Apps in London and Nick Vinocur in Paris; Editing by Maria Golovnina)
(Reporting by William Maclean)