"I am in Tripoli and not in Venezuela," he said, according to Al Jazeera.
"I am going to meet with the youth in Green Square," in downtown Tripoli, he said in what state television reported was a live broadcast from the strongman's home, AFP reported.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"It's just to prove that I am in Tripoli and not in Venezuela and to deny television reports, those dogs," he said, holding up an umbrella in pouring rain while about to step into a car.
Rain lashed Tripoli on Monday evening.
But an opposition leader speaking to Al Jazeera English said it was not convincing, adding that during US bombing raids in the 1980s, Gaddafi was able to flee the capital via tunnels.
A suggestion in Brussels earlier Monday by British Foreign Secretary William Hague that Gaddafi may have left the country for Venezuela was swiftly denied by Caracas, home to the Gaddafi's firebrand ally President Hugo Chavez.
Foreign Minister Nicolas Maduro spoke to his Libyan counterpart Mussa Kussa, who told him Gaddafi was "in Tripoli, exercising his powers of state and confronting the situation in the country," the foreign ministry in Caracas said in a statement.
The appearance came after a brutal crackdown on protesters, with hundreds of deaths reported, and numerous resignations of high-level officials.
Fighter jets have reportedly fired on civilians in urban areas, a claim the government denied, while more reports have emerged of groups of sub-Saharan African 'mercenaries' firing indiscriminately on unarmed protesters.
Full coverage: Arab world unrest
