The decision by The Hague-based ICC comes on the 100th day of NATO's operations in Libya, with airstrikes having eased the siege of key rebel cities.
"The chamber hereby issues a warrant of arrest against Muammar Qaddafi," Judge Sanji Mmasenono Monageng said during a hearing at the Hague-based court.
She also issued arrest warrants for Colonel Qaddafi’s son Seif al-Islam, 39, and the head of Libyan intelligence, Abdullah al-Senussi, 62, for murder and persecution since the uprising began in February.
All three are charged over their roles in suppressing the revolt, in which civilians were murdered and persecuted by Libyan forces, particularly in Tripoli, Benghazi and Misrata, the prosecutor said.
As the court proceedings have moved forward in The Hague, the fighting has raged between Colonel Qaddafi’s troops and rebel forces near Tripoli.
Rebel commanders said the fighting centered on Bir al-Ghanam, a strategic point on the road to the Libyan capital.
“We are on the southern and western outskirts of Bir al-Ghanam," Juma Ibrahim, a rebel spokesman in the nearby town of Zintan, told Reuters by telephone.
"There were battles there most of yesterday. Some of our fighters were martyred and they (government forces) also suffered casualties and we captured equipment and vehicles. It's quiet there today and the rebels are still in their positions," he said.
Meanwhile, the African Union panel on Libya meeting in the South African capital Pretoria said Colonel Qaddafi would not participate in peace talks, in what appeared to be a concession.
The panel "welcomes Colonel Qaddafi’s acceptance of not being part of the negotiations process," AU peace and security commissioner Ramtane Lamamra said, reading a prepared statement issued after four hours of talks.
All three are charged over their roles in suppressing the revolt, in which civilians were murdered and persecuted by Libyan forces, particularly in Tripoli, Benghazi and Misrata, the prosecutor said.
As the court proceedings have moved forward in The Hague, the fighting has raged between Colonel Qaddafi’s troops and rebel forces near Tripoli.
Rebel commanders said the fighting centered on Bir al-Ghanam, a strategic point on the road to the Libyan capital.
“We are on the southern and western outskirts of Bir al-Ghanam," Juma Ibrahim, a rebel spokesman in the nearby town of Zintan, told Reuters by telephone.
"There were battles there most of yesterday. Some of our fighters were martyred and they (government forces) also suffered casualties and we captured equipment and vehicles. It's quiet there today and the rebels are still in their positions," he said.
Meanwhile, the African Union panel on Libya meeting in the South African capital Pretoria said Colonel Qaddafi would not participate in peace talks, in what appeared to be a concession.
The panel "welcomes Colonel Qaddafi’s acceptance of not being part of the negotiations process," AU peace and security commissioner Ramtane Lamamra said, reading a prepared statement issued after four hours of talks.
Muammar Qaddafi is Libya's historical symbol, and he is above all political actions, above all political and tactical games 
Libya government spokesman Moussa Ibrahim
A South African official, part of a team that travelled to Tripoli last month in a failed bid to launch peace talks, said that the latest developments indicate that Colonel Qaddafi is on his way out.
"This means he is finished," he said.
On Saturday, Abdel Hafiz Ghoga, vice chairman of the National Transitional Council (NTC), said that the council had been in touch with loyalists about the possibility of Colonel Qaddafi submitting to internal exile.
However, on Sunday Colonel Qaddafi’s government said he is the historical choice of the Libyan people and cannot be moved aside, stepping back from earlier statements offering an election on his future role.
"Muammar Qaddafi is Libya's historical symbol, and he is above all political actions, above all political and tactical games," a government spokesman, Moussa Ibrahim, said in a statement issued late on Sunday.
"In this current stage and in the future, Qaddafi is the historical choice which we cannot drop."
"As for the current and future Libya, it is up to the people and the leadership to decide it and it is not up to the armed groups, nor up to NATO to decide it," the statement said.
Mr. Ibrahim said he issued the statement to clarify remarks he made earlier on Sunday. At the time, he had told reporters in Tripoli the government was proposing a period of national dialogue and an election overseen by international observers.
"If the Libyan people decide Qaddafi should leave he will leave. If the people decide he should stay he will stay," Mr. Ibrahim said earlier in the day.
The idea of holding an election was first raised earlier this month by Seif al-Islam Qaddafi.
Crimes continue today in Libya. To stop the crimes and protect civilians in Libya, Qaddafi must be arrested ICC prosecutor Luis Moreno-Ocampo
Many analysts say Colonel Qaddafi and his family have no intention of relinquishing power. Instead, they say, the Libyan leader is holding out the possibility of a deal to try to widen cracks that have been emerging in the alliance ranged against him.
Meanwhile, three Libyan government ministers were in Tunisia for talks with international parties on efforts to halt the conflict in their country, Tunisia's official news agency, TAP, reported on Monday.
It said Libya’s health minister, Mohammed Hijazi, and the social affairs minister, Ibrahim Sherif, arrived on Sunday in the tourist resort of Jerba, in southern Tunisia, where the talks were under way.
They joined Abdelati al-Obeidi, the Libyan foreign minister, who has been in Tunisia since last Wednesday and "in negotiations with several foreign parties," TAP said without giving further details.
A senior official representing Libya's rebels said they were expecting to receive an offer from Colonel Qaddafi "very soon" that could end the four-month-old war.
Mr. Ghoga said intermediaries had indicated that a proposal from the Libyan strongman was in the works.
Thousands have died in the fighting, while approximately 650,000 others have fled the country. Another 243,000 Libyans have been displaced internally, according to UN figures.
On Sunday, ICC prosecutor Luis Moreno-Ocampo said the war crimes in Libya will not stop until Colonel Qaddafi is arrested.
"Crimes continue today in Libya. To stop the crimes and protect civilians in Libya, Qaddafi must be arrested," Mr. Moreno-Ocampo said in a statement.
Three months after French jets flew their first missions over eastern Libya, NATO is still pounding targets across the country in what has become a war fought on multiple fronts, but with few clear victories for either side.
As "Operation Unified Protector" approaches its 5,000th strike sortie, NATO is still hitting around 50 targets a day, mostly in or around Tripoli and Misrata in the west, Brega in the east, and the Nafusa Mountains to the south of the capital.
But the alliance's early success in pushing Colonel Qaddafi’s forces outside striking distance of Benghazi and Misrata have not yet decisively tipped the balance in favor of the rebels.
An uneasy stalemate has taken hold, with rebel fighters told to hold their positions around Misrata and Ajdabiya, near Brega, despite the occasional rocket or mortar attack causing casualties.
(Sara Ghasemilee, a senior editor with Al Arabiya English
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