The first paper to have this today was Asharq al-Awsat, which is owned by one of Qaddafi’s enemies in the Saudi royal family, so I dismissed it. But then Al Jazeera started buzzing about it and now no less than the Wall Street Journal is claiming it’s true.

Mystifying.

In Tripoli, reform-minded officials in the government were lobbying for a plan that calls on Col. Gadhafi to cede power to a council of technocrats who could shepherd a transition toward democratic reforms and a government based on modern institutions, according to a person familiar with the situation.

Under this plan, Col. Gadhafi would be given an honorary title reflecting his service to the country, but be removed from day-to-day decision-making, according to this person.

Members of Col. Gadhafi’s family have been briefed on the plan, according to this person. The threat of prosecution at an international criminal court could deter Col. Gadhafi from agreeing to a negotiated solution, a U.S. official said…

Mr. Obama on Monday repeated that those close to Col. Gadhafi are in a position to decide which side they are on, and would be held accountable for their actions.

“People around [Gadhafi] are getting nervous, and they should,” said a U.S. official.

The person familiar with the government reform proposal said “more than 60%” of officials within government were supportive of a change in government and national reconciliation.

According to Reuters, one of Qaddafi’s confidants went on state TV to talk up negotiations, so yeah, this appears to be more than just western propaganda. And yet, the whole thrust of the news out of Libya over the weekend was that Qaddafi had regained some momentum, using airstrikes against protesters and pushing them out of the town of Bin Jawwad. Rebels in the area complained to reporters that they were outgunned and that “Qaddafi’s forces have really, really grown.” The air force is stocked with loyalists to the regime; so is the city of Sert, which lies on the rebels’ path to Tripoli and where they’re expected to meet heavy resistance. (One expert told Time, “I don’t think the opposition can capture Sert without help from the U.S., the U.K. or NATO.”) And the rebels themselves aren’t trained soldiers, needless to say. The LA Times marvels at them firing off rounds of scarce ammunition in celebration after retaking a town from some of Qaddafi’s goons, and then…

A professional fighting force would have cleared Bin Jawwad house by house Saturday to ferret out lingering pro-Kadafi fighters. But the rebels spent the day snapping souvenir photos, waving flags and firing off their weapons. Then they rested.

The next morning, pro-Kadafi fighters launched their assault by firing on the rebels from the cover of houses. They were backed by helicopter gunships and artillery in the kind of coordinated attack the outgunned rebels have yet to attempt.

Nor did the rebels try to win the loyalties of five local tribes whose support has wavered between the rebellion and Kadafi. Instead, they alienated the tribesmen by shooting up their town and terrifying their wives and children.

So why, given all that, would Qaddafi be looking for the exit? Three possibilities. One: Maybe he’s already run into difficulties resupplying himself with men or materiel and knows he can’t keep this up forever. Between the apparent dissension among his inner circle and the White House saying last night that plans are in the works to jam communications within Qaddafi’s military, the simple logistics of fending off a nationwide rebel assault may be becoming too difficult. Two: Even if he thinks he can still win, what’s his “prize” for winning? He’s lost whatever little international legitimacy he had from giving up his nuke program eight years ago. The fear and awe he inspired at home is broken irretrievably; even if he held on and crushed the rebels in the east, he’d worry constantly about a new revolt. Plus, his neighbors hate him. Egypt may already be eyeing Libya’s oil fields, and the Saudis might pay him back for trying to assassinate King Abdullah by sending arms to the rebels. If Qaddafi can “retire” to Venezuela with a few billion instead of dealing with all that, why not do it?

Three: He thinks the west is going to act sooner rather than later. After the weekend’s airstrikes, some rebels are now begging the UN for a no-fly zone. Russia and China are cool to the idea, but diplomats are telling Reuters that they can probably be persuaded. Once that happens and Qaddafi can’t fly in more guns and goons, it’s a matter of time before he’s overrun. Which explains why his inner circle is suddenly leaning on him to go and why Qaddafi himself is apparently interested in immunity from international law. If the supply lines are about to cut, they really can’t afford to stay in power. And as David Frum explains, we really can’t afford to let him stay in power either:

Here is a consideration that should top the president’s thinking process: What message will it send if Moammar Gadhafi survives?

An anti-American, anti-Western supporter of international terrorism can hold power by killing large numbers of his own people. Meanwhile, nondemocratic rulers aligned with the West are nudged from power by their former friends…

If Gadhafi and Iranian President Mahmoud Ahmadinejad still rule territory in a month’s time, and if Hezbollah and Hamas continue to rely on their armed presence to back up the militant policies they impose, the promises of Middle Eastern democracy will look very hollow. And the incentive structure of the Middle East will acquire a sinister new look.

Gadhafi’s departure from power in other words is not just a requirement of humanity and decency. It’s not only justice to the people of Libya. It is also essential to American credibility and the stability of the Middle East region.

“Credibility and stability” are why The One has now shifted his policy from regime change to, ahem, “regime alteration,” but Frum’s right — if no anti-American regimes fall during the “Arab spring,” it’s an invitation for American allies to abandon the White House and crack down hard.

The one thing I can’t figure out in all this, though: Why would a totalitarian like Qaddafi do something as rational as negotiating an exit from an unwinnable situation? What would a “Brother Leader” do with himself without his “family”?

Update: Anne Applebaum complains that it would be presumptuous of the west to intervene when no one in the Arab world has asked us to. As noted above, some have asked us to — including the vice president of the rebels’ provision council. But if that’s not good enough, here’s news off the wires from just this morning:

The Arab League supports imposing a no-fly zone over Libya to prevent Moamer Kadhafi’s government forces attacking rebels, French officials said Monday, quoting the league’s secretary general.

Secretary general Amr Mussa told French Foreign Minister Alain Juppe that the league backed the idea when the pair met in Cairo on Sunday, foreign ministry spokesman Bernard Valero told reporters.

“Mr. Musa confirmed the support of the Arab League for a no-fly zone,” Valero said.