Libyan leader Muammar Qadhafi threatened on Tuesday to ally his forces with al Qaeda and declare a “holy war” if Western powers invade his country.

In an interview with the Italian newspaper Il Giornale, Qadhafi said he felt betrayed by former European allies like Italian Prime Minister Silvio Berlusconi, and said he ruled out negotiations with Libya’s anti-government rebels, which he called “terrorists linked to Osama bin Laden.”

When asked if he feared a demise similar to that of former Iraqi President Saddam Hussein, who was ousted by a U.S.-led invasion and later executed for war crimes, Qadhafi said: “No, our war is against al Qaeda.”

But he continued, saying, “If they [the West] behave with us as they did in Iraq, then Libya will leave the international alliance against terrorism. We will then ally ourselves with al Qaeda and declare a holy war.”

Qadhafi dismissed calls in the international community for a no-fly zone over Libya, or the prospect of airstrikes, saying that such a move by Western powers would “only serve to unite the Libyan people.”

Qadhafi also said that Europe’s criticism of his leadership, which culminated last week in demands by EU leaders for him to leave office, threatened Euro-Libyan relations.

“I was really shocked by the attitude of my European friends,” he said. “They have damaged and endangered a series of major accords on security that were in their interests and the economic cooperation that we had.”

In the interview, Qadhafi went on to accuse French President Nicolas Sarkozy of having a “mental disorder” since the French leader called for targeted airstrikes on Libya and has officially recognized the rebel Libyan National Council.

Until the clashes erupted between forces in eastern Libya and troops loyal to Qadhafi, economic relations between Tripoli and Europe had been flourishing. Italy had developed particularly warm ties with Libya, its former colony, as evidenced by agreements between Rome and Tripoli to block illegal immigration from Africa into Europe.

Qadhafi said these links are now threatened.

In response to a question about his relationship with Berlusconi, formerly Qadhafi’s closest friend in Europe, he said, “I am so shocked, I feel betrayed, I don’t even know what to say to Berlusconi.”

Meanwhile, al Qaeda has officially admitted to angling to gain a foothold in Libya.

The terrorist group’s top-ranking Libyan member, Abu Yahya al-Libi, spoke out about the Libyan uprising for this first time this past weekend urging his fellow countrymen to overthrow Qadhafi and establish Islamic rule in the nation. Al-Libi said such a toppling would aid al Qaeda’s efforts to harness the momentum from the waves of unrest sweeping through the region.

Al-Libi, who is Osama bin Laden’s head of operations in Afghanistan, then called on Libyans to do to Qadhafi what he has done to Libyans throughout his four-decade reign: kill him. “Retreating will mean decades of harsher oppression and greater injustices than what you have endured,” al-Libi said. He also said Islamic law should be instated once Libya has toppled its Western-supported rulers, and that the destruction of these Western-backed regimes was “a step to reach the goal of every Muslim, which is to make the word of Allah the highest.”

Qadhafi cautioned the West about the result of such a scenario, saying, “If instead of a stable government which guarantees security, these bands linked to bin Laden take control, the Africans will move in a mass towards Europe, and the Mediterranean will become a sea of chaos.”

In the April edition of the Philadelphia Trumpet, editor in chief Gerald Flurry points to prophecies in the Book of Daniel, urging readers “to continue to watch for Libya … to make a severe and rapid turn into the radical Islamic camp.”

Whether Libya’s rapid turn toward radical Islam is the result of Qadhafi’s rage toward the West, or the result of his regime being replaced by Islamist leadership, the outcome is the same. Libya will make a rapid turn toward the radical Islamic camp, and Europe may well see the Mediterranean become the “sea of chaos” that Qadhafi predicted.