The outgoing head of the Arab League and a frontrunner to become president of a democratic Egypt has voiced reservations about Nato's bombing campaign in Libya, calling for a ceasefire and talks on a political settlement while Muammar Gaddafi remains in power.

Amr Moussa, the veteran Egyptian diplomat who played a central role in securing Arab support for Nato air strikes, told the Guardian he now had second thoughts about a bombing mission that may not be working. "When I see children being killed, I must have misgivings. That's why I warned about the risk of civilian casualties," he said.

Nato admitted this week that it had blundered when a rogue missile killed nine civilians, including children, in Tripoli, while the Libyan regime has claimed another 15 civilians were killed in an attack on a compound west of Tripoli that Nato has confirmed it targeted.

Arab support, in the form of an endorsement from the Arab League, was essential to the Anglo-French-led bombing campaign launched in March following a UN security council resolution mandating the use of force to protect Libyan civilians.

But senior European officials say the Arab world is turning against the west over the Libya campaign. "The Arab League is telling us that we are losing the support of the Arab world," said one source involved in negotiations over Libya.

In an interview with the Guardian in Brussels, Moussa made clear he thought the military campaign would not produce a breakthrough. "You can't have a decisive ending. Now is the time to do whatever we can to reach a political solution," he said.

"That has to start with a genuine ceasefire under international supervision. Until the ceasefire, Gaddafi would remain in office … Then there would be a move to a transitional period … to reach an understanding about the future of Libya."

Asked whether that meant a halt to the Nato air strikes, he said: "A ceasefire is a ceasefire."

According to senior diplomats and officials in Brussels dealing with the Libyan crisis, there are absolutely no signs of Gaddafi giving up. They also say that the opposition leadership in Benghazi will have no truck with Gaddafi and is making his removal a precondition for a negotiated settlement of the war. Repeated offers of a ceasefire from Gaddafi have been dismissed as meaningless by the Nato leadership and western governments.

"There are different political channels going on to persuade the Gaddafi regime it has to go," said the senior EU official. UN envoys, the Russian government, and the South Africans had been talking quietly either directly with Gaddafi or with his entourage. All reported no progress.

"The Russians have just tried mediating and came back from Tripoli saying Gaddafi is not moving one bit," said the official.

Moussa headed the Arab League for a decade until three weeks ago and remains its caretaker chief until his successor takes over in September. He indicated that inquiries were being made to see if any countries, possibly in Africa or the Middle East, would be willing to offer Gaddafi safe haven and even raised the possibility that he could stand down but stay in Libya.

While voicing misgivings about the air campaign, Moussa said the Arab League supported it initially because of Gaddafi's attacks on civilians. The league's response, however, to the Syrian regime's killing of an estimated 1,400 civilians was different. "There was unanimity on Libya, but [on Syria] there are some hesitations because of strategic, political considerations."

Arab leaders were worried about the impact of the Syrian crisis in Lebanon, Iraq, Jordan, and on the Kurdish issue. Nonetheless, he added, "we are outraged by all that has happened in Tunisia, in Syria, in Libya, in Yemen … The vast majority [in the Arab League] is not comfortable with what is going on in Syria."

Of the Syrian president, Bashar al-Assad, Moussa said: "[His] chance is eroding. It is a race. You have to change as fast as you can. It is a race between reform or revolution." The upheavals of the past six months meant that no Arab society would remain untouched, he added.

At the age of 74, Moussa was an unlikely figurehead for the Egyptian revolution, but he appears to be popular and trusted by the younger leaders who helped topple the Mubarak regime in February, despite the fact that he served that regime for a long time as a senior diplomat, ambassador and foreign minister.

He is running for president in an election that he says should not be held until the end of the year at the earliest. If he won, he said, he would only want to serve one term because of his age.

"Egypt is going to be a democratic republic with a constitution, a president, a council of ministers, a parliament," he declared. But while the Egyptian army remains in charge, it is not clear how that move is to be sequenced and organised.

Moussa argued passionately for presidential elections to be held before a parliamentary ballot despite the momentum towards a parliamentary vote within a few months. "I disapprove of parliamentary elections in September because the landscape is not ready," he said.

If priority was given to drafting a new constitution, then parliamentary elections should be shelved and instead a constituent assembly should be elected to write the new charter.

Moussa was worried that the attempt to entrench a new democratic system could result in an ascendancy of the Muslim Brotherhood and plunge Egypt into chaos. "I can't blame the Muslim Brotherhood for being disciplined and organised. The others are not organised," he said.

Moussa predicted that the Brotherhood could take up to 35% of the vote in a September parliamentary poll, allowing it to construct a coalition, dominate the new assembly, and take over the running of the country. "Then there would be chaos," he warned. "There would be no new constitution. I prefer to work for a presidential system because the political landscape in Egypt is not yet mature. Not because of the Muslim Brotherhood per se, but because the situation is not fully ready."