The transitional government leader Mustafa Abdul-Jalil called on Libyans to show "patience, honesty and tolerance" and eschew hatred as they embark on rebuilding the country at the end of an 8-month civil war.
Abdul-Jalil set out a vision for the post-Qaddafi future with an Islamist tint, saying that Islamic Sharia law would be the "basic source" of legislation in the country and that existing laws that contradict the teachings of Islam would be nullified.
In a gesture that showed his own piety, he urged Libyans not to express their joy by firing in the air, but rather to chant "Allahu Akbar," or God is Great. He then stepped aside and knelt to offer a brief prayer of thanks.
"This revolution was looked after by God to achieve victory," he told the crowd at the declaration ceremony in the eastern city of Benghazi, the birthplace of the uprising against Qaddafi began. He thanked those who fell in the fight against Qaddafi's forces. "This revolution began peacefully to demand the minimum of legitimate rights, but it was met by excessive violence."
Tens of thousands gathered in the eastern city of Benghazi Sunday as Libya's transitional leader declared his country's liberation, three days after ousted dictator Muammar Qaddafi was captured and killed.
President Obama congratulated Libya on their declaration of liberation.
"After four decades of brutal dictatorship and eight months of deadly conflict, the Libyan people can now celebrate their freedom and the beginning of a new era of promise," Obama said in a statement.
"We look forward to working with the NTC and an empowered transitional government as they prepare for the country's first free and fair elections," Obama said.
The liberation celebration was clouded, however, by mounting calls for an investigation into whether Qaddafi was executed while in custody.
An autopsy confirmed that Qaddafi died from a gunshot to the head, Libya's chief pathologist, Dr. Othman al-Zintani, said hours before the liberation declaration was to start the clock on a transition to democracy.
However, the pathologist said he would not disclose further details or elaborate on Qaddafi's final moments, saying he would first deliver a full report to the attorney general. Libya's acting prime minister said he would not oppose an investigation, but cited an official reporting saying a wounded Qaddafi was killed in cross-fire following his capture.
U.S. Secretary of State Hillary Rodham Clinton and Britain's new defense secretary, Philip Hammond, said a full investigation is necessary.
The Libyan revolutionaries' image had been "a little bit stained" by Qaddafi's death, Hammond said Sunday, adding that the new government "will want to get to the bottom of it in a way that rebuilds and cleanses that reputation."
"It's certainly not the way we do things," Hammond told BBC television. "We would have liked to see Col. Qaddafi going on trial to answer for his misdeeds."
The 69-year-old Qaddafi was captured wounded, but alive Thursday in his hometown of Sirte, the last city to fall to revolutionary forces. Bloody images of Qaddafi being taunted and beaten by his captors have raised questions about whether he was killed in crossfire as suggested by government officials or deliberately executed.
Qaddafi's body has been on public display in a commercial freezer in a shopping center in the port city of Misrata, which suffered from a bloody siege by regime forces that instilled a virulent hatred for the dictator in Misrata's residents. People have lined up for days to view the body, which was laid out on a mattress on the freezer floor. The bodies of Qaddafi's son Muatassim and his ex-defense minister Abu Bakr Younis also were put on display, and people wearing surgical masks have filed past, snapping photos of the bodies.
The New York-based group Human Rights Watch, which viewed the bodies, said video footage, photos and other information it obtained "indicate that they might have been executed after being detained."
"Finding out how they died matters," said Sarah Leah Whitson of Human Rights Watch. "It will set the tone for whether the new Libya will be ruled by law or by summary violence."
The Syrian-based Al-Rai TV station, which has served as a mouthpiece for the Qaddafi clan, said the dictator's wife, Safiya, also demanded an investigation.
"I am proud of the bravery of my husband, Muammar Qaddafi, the holy warrior, and my sons who confronted the aggression of 40 countries over the past six months," the station quoted the widow as saying in a statement.
Jibril, the acting Libyan prime minister, said he would not oppose an inquiry into Qaddafi's death, but that there is "no reason" to doubt the credibility of an official report that the ousted leader died in cross-fire.
"Have you seen a video of somebody killing him? I haven't seen any video tape or mobile film that shows somebody is killing Qaddafi," Jibril told reporters in Jordan where he was attending an international economic conference.
"What I told the press several times ... (is) that coroner says in the medical report that he (Qaddafi) was already wounded, taken out, put in that truck and on the way to the field hospital there was cross-fire from both sides," Jibril said. Jibril said it's unclear whether the fatal bullet was fired by loyalists or revolutionary forces.
The vast majority of Libyans seemed unconcerned about the circumstances of the hated leader's death, but rather was relieved the country's ruler of 42 years was gone, clearing the way for a new beginning.
"If he (Qaddafi) was taken to court, this would create more chaos, and would encourage his supporters," said Salah Zlitni, 31, who owns a pizza parlor in downtown Tripoli. "Now it's over."
The long-awaited declaration of liberation starts the clock on Libya's transition to democracy. The transitional leadership has said it would declare a new interim government within a month of liberation and elections for a constitutional assembly within eight months, to be followed by votes for a parliament and president within a year.
At the ceremony in Benghazi, Abdul-Jalil outlined several changes to align with Islamic law.
"This revolution was looked after by God to achieve victory," he said.
Abdul-Jalil said new banks would be set up to follow the Islamic banking system, which bans charging interest as a practice deemed usury. For the time being, he said interest would be canceled from any personal loans already taken out and less than $7,500.
He also announced the annulment of an existing family law that limits the number of wives Libyan can take, contradicting the provision in the Muslim holy book, the Quran, that allows men up to four wives.
And he urged Libyans to hand back money or property taken during the civil war.
Abdul-Jalil thanked those who fought and fell in the fight against Qaddafi's forces.
"They are somewhere better than here, with God," he said.
The Associated Press contributed to this report.