Muammar Gadhafi's spokesman told Reuters on Saturday that NATO air strikes on Sirte overnight had hit a residential building and a hotel, killing 354 people.
His claim could not immediately be verified as Sirte, Gadhafi's hometown, has been largely cut off from communication since the fall of Tripoli.
"We are aware of these allegations," Colonel Roland Lavoie, spokesman for the Western military alliance, said in Brussels.
"It is not the first time such allegations have been made. Most often, they are revealed to be unfounded or inconclusive."
Moussa Ibrahim, in a call from a satellite phone to Reuters office in Tunis, said: "NATO attacked the city of Sirte last night with more than 30 rockets directed at the city's main hotel and the Tamin building, which consists of more than 90 residential apartments.
"The result is more than 354 dead and 89 still missing and almost 700 injured in one night."
Ibrahim said Gadhafi was personally directing loyalist fighters who are holding back provisional government forces at his remaining strongholds in Libya.
"He is leading all aspects of this struggle. He is talking to the people, he is lecturing, he is discussing, he is looking after all matters of the resistance," he said.
Ibrahim said Gadhafi was in Libya and confident of victory.
"We will be able to continue this fight and we have enough arms for months and months to come," he said.
"In the last 17 days more than 2,000 residents of the city of Sirte were killed in NATO air strikes," he said.