"The security forces are thoroughly sweeping the operational area. Most of the prisoners are in the hands of the gendarmerie (police) and are being well-treated. The enemy is fleeing," Defence Minister Brahim Daoud Yaya told a news conference.

"We are never going to dialogue with terrorists."

The Front for Change and Concord in Chad (FACT), a large armed group with a rear base in Libya, mounted an offensive on April 11 as the country was to hold presidential elections.

Deby, a former general who had been in power for 30 years, led the fighting against the insurgents.

According to the authorities, he died on April 19 from combat injuries in the Kanem desert region, about 300 kilometres (200 miles) north of the capital N'Djamena, close to the border with Niger.

"Libya is the terrorists' stronghold," the minister said.

He added, however, "I cannot accuse Libya of supporting the terrorists, as there is no state in Libya."

Deby's death occurred on the same day that he was declared victor in the presidential results and that the army claimed to have killed 300 FACT rebels, according to official announcements.

Another 246 rebels have been captured and handed over the judicial authorities, according to the authorities.

Fighting has been continuing in the area of Nokou, in the administrative region of North Kanem.

Last week, a Chadian military helicopter crashed there after what the army said was a breakdown, while FACT said it had downed the aircraft.

A military junta took power immediately after Deby's shock death, headed by his 37-yearold son Mahamat, a four-star general.

On Sunday it unveiled a 40-member transitional government, the key posts of which have gone to members of the former president's MPS party.

The military rulers have vowed to hold "free and democratic" elections following an 18-month transition period.