The TV broadcast showed a man wearing a white turban and sitting in a wheelchair during Tuesday's rally and identified him as Abdel Baset Al Megrahi, the Lockerbie bomber.
Al Megrahi's presence at the rally appeared to be another sign of defiance by the Gaddafi regime.
Gaddafi, locked in a civil war with Libyan rebels for the past five months, has rejected calls by the international community that he step down. Instead, he has threatened to attack targets in Europe unless NATO stops its four-month-old bombing campaign of regime-linked installations in Libya, under a UN mandate to protect civilians.
Al Megrahi was convicted in the 1988 downing of the Pan America plane that killed 270 people, most of them Americans, over Scotland. He was released from a Scottish prison in 2009 after being diagnosed with prostate cancer. Al Megrahi returned to a hero's welcome in Libya later that year.
Britain, meanwhile, officially recognised Libya's main Opposition group as the country's legitimate government, and on Wednesday expelled all diplomats from Gaddafi's regime.
Foreign Secretary William Hague said Britain is unfreezing 91 million pounds ($150 million) of Libyan oil assets to help the rebels' National Transitional Council, which the UK now recognizes as "the sole governmental authority in Libya."
Hague said the council had been invited to send an ambassador to London, adding that "we will deal with the National Transitional Council on the same basis as other governments around the world."
Gaddafi has ruled Libya for more than four decades.
In February, anti-government protests erupted in the country, inspired by uprisings elsewhere in the Arab world, but quickly escalated into civil war. However, the conflict has been deadlocked for months, with rebels controlling the east of the country in the west, and
Gaddafi clinging to power in the remaining areas.
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