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In a rambling speech before the United Nations General Assembly, Libyan ruler Muammar Gadhafi encouraged Israelis to continue settling the West Bank but to prepare for eventually becoming citizens of "Isratine," a combination of Israel and Palestine.

The Libyan leader, who has long been one of Israel's harshest critics, did not lash out as he has done in the past. Instead, he reiterated his call for a single state in which Jews and Palestinians would live together.

"The solution is a democratic state without religious fanaticism," he said. "Everybody should live in peace. Isratine, Isratine is the solution."

In his first ever address to the United Nations, Gadhafi on Wednesday accused the veto-wielding powers of the Security Council of betraying the principles of the UN charter.

"The preamble (of the charter) says all nations are equal whether they are small or big," Gadhafi said through an interpreter. He received a smattering of applause.

Reading from a copy of the UN charter, Gadhafi said: "The veto is against the charter, we do not accept it and we do not acknowledge it."

Clad in a copper-colored robe with an emblem of Africa pinned over his chest, the Libyan leader dropped his paperback copy of the charter on the podium several times before tossing it over his shoulder.

The United States, Britain, France, Russia and China are permanent veto wielding members of the Security Council, the most powerful body within the United Nations. Libya has a temporary council seat and will be on the 15-nation panel until the end of 2010.

"Veto power should be annulled," Gadhafi said.

"The Security Council did not provide us with security but with terror and sanctions," he told leaders gathered for the opening day of the 192-nation General Assembly .

Gadhafi, who spoke just after U.S. President Barack Obama, said the fact that "65 wars" have broken out since the UN was established more than 60 years ago proved its founding principles had been betrayed.

Gadhafi currently chairs the African Union.

While Gadhafi addressed the UN, crowds of protesters lined up across the world body's headquarters in New York to denounce the Libyan ruler. Some of them carried signs which read "Terrorist" and "The Last Dictator at the UN."

The demonstrators also criticized the UN for permitting Gadhafi to appear, thus "granting refuge to a murderer."

During Gadhafi's speech, a number of delegates left the hall and at one point the Libyan leader complained about the tired appearance of the audience. "Please can I have your attention," he said. "All of you are tired, having jet lag. ... You are tired. All of you are asleep."

"The election of Obama is the beginning of change," he said and applauded Obama's stated commitment to nuclear disarmament. Other U.S. presidents, he said, had "terrorized" his region.