The ruling is a "cover for NATO which is still trying to assassinate Kadhafi," said Libya's justice minister, Mohammed al-Gamudi.
ICC chief prosecutor Luis Moreno-Ocampo sought the warrants as thousands died in fighting and an estimated 650,000 people fled the country with Kadhafi clinging to power despite NATO strikes easing the siege of key rebel cities.
The Libyan government said Monday that a luxury bus parked at the leader's Tripoli residence had been destroyed in the latest of the raids which started on March 19.
The White House hailed the ICC warrant for war crimes and crimes against humanity, describing the move as "another indication" that Kadhafi has lost all legitimacy.
Britain, another leading member of the UN-mandated international effort to protect civilians against Kadhafi's forces, also welcomed the court's decision and said members of the Libyan regime should now abandon him.
"Individuals throughout the regime should abandon Kadhafi," Foreign Secretary William Hague said.
Italy said the decision of the court, set up in 2002, confirmed that Kadhafi had lost all "moral legitimacy" and could have "no role in the future of his country".
French Foreign Minister Alain Juppe said the warrant "confirms that the question is not whether Kadhafi should leave power, but when he will leave power."
The ICC said the three men are charged for their roles in suppressing the revolt, in which civilians were murdered and persecuted by Libyan forces, particularly in Tripoli, Benghazi and Misrata.
Al-Gamudi noted that his country was not a signatory to the tribunal's founding Rome Statute, and "does not accept the jurisdiction of the court."
The only other warrant issued by the court for a sitting head of state, for Sudan's President Omar al-Bashir in March 2009, has yet to be executed. Bashir later Monday was due to begin a state visit later to China, which also is not a signatory of the statute.
The head of Libya's rebel National Transitional Council, Mustafa Abdel Jalil, told a news conference in the rebel capital of Benghazi that "justice had been done."
In The Hague, rebel justice minister Mohammed Al-Allagy told reporters outside the ICC: "We are going to arrest them."
Al-Allagy said: "First arrest them, we will decide afterwards where to prosecute them."
In his submission, Moreno-Ocampo said Kadhafi had a personal hand in planning and implementing "a policy of widespread and systematic attacks against civilians and demonstrators and dissidents in particular."
"Kadhafi's plan expressly included the use of lethal force against demonstrators and dissidents," the prosecutor contended.
The Libyan strongman ordered sniping at civilians leaving mosques after evening prayers, said the submission, and his forces carried out a systematic campaign of arrest and detention of alleged dissidents.
"Kadhafi's plans were carried out through his inner circle, which included Seif al-Islam, Kadhafi's de-facto prime minister and his brother-in-law Al-Senussi, considered to be his right-hand man," the document said.
Moreno-Ocampo's investigation follows a referral by the United Nations Security Council on the Libyan conflict on February 26. The prosecutor's office launched its investigation five days later. On May 16, Moreno-Ocampo asked the court for the warrants.
The prosecutor will react to the decision at a press conference on Tuesday.
The ICC is the world's only permanent, treaty-based court set up to try those accused of war crimes, crimes against humanity and genocide if the accused's own country cannot or will not do so.
Michael Bochenek from Amnesty International said in a statement: "A failure to arrest and prosecute the accused men would send a disturbing message that such crimes can continue to be committed with impunity."
NATO meanwhile said it was hitting around 50 targets in Libya a day and that its "Operation Unified Protector" was approaching its 5,000th sortie.
The air strikes appear to have helped the rebels launch an offensive of their own against Kadhafi's forces. However, only in Nafusa does the rebel army of ill-equipped irregulars and defectors appear to be making any sustained progress.
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