"We need to create a problem for the world. This is not a declaration of war. This is a call for peace"

Palestinian refugees should capitalize on the wave of popular revolts in the Middle East by massing peacefully on the borders with occupied Palestine until Israel gives in to their demands, Libyan leader Muammar Gaddafi said on Sunday.

Gaddafi was giving his first major speech since a popular uprising in neighboring Egypt forced President Hosni Mubarak to resign, an event which electrified the Arab world and prompted speculation that other Arab governments could also be toppled.

"Fleets of boats should take Palestinians ... and wait by the Palestinian shores until the problem is resolved," Gaddafi was shown saying on state television. "This is a time of popular revolutions."

"We need to create a problem for the world. This is not a declaration of war. This is a call for peace," he said in a speech given to mark the birthday of the Prophet Mohamed, a holy day in the Islamic calendar.

Gaddafi also issued a call to Muslim countries to join forces against Western powers. He said the world was divided into white, denoting the United States, Europe and their allies, and green for the Muslim world.

"The white colour has decided to get rid of the green colour," Gaddafi said. "These countries should be united against the white colour because all of these white countries are the enemies of Islam." He also said: "All Arab states which have relations with Israel are cowardly regimes."