Libyan protesters fly pre-Gadhafi flags

>> big nation and big prize in this wave of uprising in the nation. it's the bloodiest we've seen so far sweeping through the arab world . we just heard richard report, this is more than a protest movement or rebellion, it's a civil war , they say, and the streets are a war zone . nbc's stephanie gosk is just east of the border with libya in the egyptian village of saloum tonight.

>> reporter: good evening, violent. protesters say they are closing in on their goal of regime change. but if moammar gadhafi is concerned about that, he certainly isn't showing it, at least not publicly. at night, tripoli's streets burn and gun battles rage. what began as a movement for more democracy has turned into a bloody civil war .

>> we just hear shooting. we hear helicopter in the air. we have been in our house for over three, four, almost four days. if you go outside, you're going to get shot at.

>> reporter: reports from eyewitnesss describe bodies littering the streets, people too afraid to leave their homes and collect the dead. with few journalists in the country the numbers are difficult to verify. hundreds have been killed. gunned down by libya 's military, and gang of well-armed mercenaries. leading the violent charge, a defiant moammar gadhafi , who today addressed his nation on state tv and refused to step down.

>> i am a fighter, a revolutionary. i will die as a martyr at the end.

>> reporter: the hour long spich was delivered from gadhafi 's former residence, damaged by u.s. air strikes in 1986 , preserved as a shrine ever since. rambling and bombastic, he described the protesters as vermin, manipulated to outside forces.

>> vintage gadhafi , totally removed from reality. he's completely unpredictable.

>> reporter: people are fleeing libya . this group of men told us they were held captive for days by mercenaries. others said they were attacked by fighter jets . most of these guys are egyptian workers fleeing the violence. we've yet to meet a single libyan. on a normal day, 500 people will cross through this crossing, today, 10,000. there are fears egypt could soon see a flood of libyan refugees. the egyptian military already has its hands full running a country with no president. and now has to stand guard at an uncertain border. there are further signs that gadhafi 's support may be eroding, the interior minister resigned today. there are a number of ambassadors that have resigned, they're flying the pregadhafi flag that is a symbol of this new revolution.

>> stephanie gosk, thank you as