The flag of the rebel-backed Transitional National Council was formally raised at the United Nations, replacing the flag of the former Libyan regime.
"Gadhafi's flag is gone because it represented violence, repression, while today the flag of freedom flies and we must work together with the new Libya," Italian Foreign Minister Franco Frattini said in a statement.
A U.N. meeting on the sidelines of the U.N. General Assembly backed transition plans outlined by Libya's new leadership.
U.N. Secretary-General Ban Ki-moon hosted more than 50 heads of state at a Friends of Libya meeting. In a statement, they praised the Libyan people for "heroically" fighting for human rights and the rule of law.
Meeting delegates called on the rebel-backed leadership to form a new government "that reflects the full diversity of Libyan society and aims to build a new, united, democratic and pluralistic Libya in which human rights, fundamental freedoms and justice will be guaranteed."
Gadhafi is on the run and wanted for war crimes allegedly committed since February. International rights groups accuse Libyan rebels of committing atrocities during the Libyan war as well.