Demonstrators out in force in Benghazi

>> you. now to our chief foreign correspondent, richard engel . he made his way into the headquarters of the anti- gadhafi rebel operation today. he's live again tonight from what is the unofficial rebel capital, the city of benghazi . richard, good evening.

>> reporter: good evening, brian. there are now effectively two libyas, one based here in benghazi , the other in tripoli, and they are locked in this deadly struggle. as gadhafi held his state-sponsored rally, his government offered libyans money. hundreds of dollars per family, and raises of 150% for some state employees. many in the libyan opposition, showed contempt. they don't want gadhafi 's money, and cut his picture from the bill. but today was gadhafi 's day to try to win back the people. to try to prove blatantly false claims that the protesters are al qaeda -led drug addicts , state television today broadcast an alleged confession. but his statements appeared to be prompted from off camera. and in benghazi , the unofficial capital of the opposition, no one is even paying attention to it. instead, demonstrators were out in force. singing and dancing on a tank, captured from the army. thousands of protesters are out to celebrate but also to taunt gadhafi . they're saying bring on the planes and mercenaries, we're ready to fight. and more images are emerging that show the extent of the fighting so far, including possible atrocities. documenting the violence is mohammed zadan. he is a former state tv reporter, now with the rebels. he is collecting hundreds of photographs and videos. most are difficult to look at.

>> these are dead bodies .

>> yeah, dead bodies .

>> reporter: as we looked at images of libyans killed execution-style, they then grew increasingly upset. one of the victims was a friend from college.

>> they killed my people.

>> reporter: in this burned-out courthouse, now the opposition headquarters, volunteers are gathering evidence of what they call war crimes , hoping one day to bring gadhafi 's regime to justice. protesters have been waiting for a strong message from washington. written in graffiti on the wall at that protester headquarters today, it said that president obama must choose between the libyan people or gadhafi . brian.

>> richard engel in the city of benghazi in libya tonight. richard, thank you. gadhafi 's son