Addis Ababa: Libyan leader Muammar Gaddafi on Saturday condemned Chadian rebels who battled their way into N'Djamena in an attempt to overthrow President Idriss Deby.

"This is a great violation," Gaddafi said at an Africa Union summit in Ethiopia.

He said that Deby had been democratically elected in 2006 and was the legal power in Chad.

In N'Djamena, Fighting was reported to be taking place around the presidential palace and the parliament.

"I can confirm [the rebels] are in the city," a foreign diplomat said.

The sound of machine gun and heavy weapons fire could be heard in the capital as foreign embassies advised their citizens to stay in doors and take cover.

"Rebels are headed for the palace and are about two blocks from here. The rebels are winning," a witness said in an email.