WASHINGTON (Reuters) - The United States believes that Libyan leader Muammar Gaddafi is still in Libya, Pentagon spokesman Colonel Dave Lapan said on Wednesday.

Libya's new masters have announced a million-dollar bounty for the fugitive Gaddafi, who urged his men to carry on a battle that kept the capital Tripoli in a state of fear.

(Reporting by Phil Stewart, Editing by Sandra Maler)