A new report by global human rights watchdog Amnesty International says Libya still tortures, imprisons and executes people for political reasons.
Colonel Gaddafi stunned many by returning Libya to the global fold
The report coincides with the arrival of Libyan leader Colonel Muammar Gaddafi on a historic visit to Europe.
Amnesty said the leader maintains a "climate of fear" and urged him to honour pledges to improve human rights.
The Europe visit marks Colonel Gaddafi's rehabilitation amongst countries that once shunned his regime.
'Must try harder'
"Libya is at a crossroads," Amnesty's report said. "It has an opportunity to ensure human rights become a reality at home and that the country can contribute to promoting human rights internationally."
It warned that "a pattern of human rights violations, witnessed over the past three decades" repeats itself to this day, often adopting "the new rhetoric of the war on terror".
The report welcomed some recent reforms initiated by Colonel Gaddafi but said these were not enough.
Libyan authorities freed nearly 300 political prisoners in 2001 and 2002, some of whom had been incarcerated since 1973, according to the report.
But, it said, political activists were still subject to the death penalty and no effort had been made to compensate past victims of the regime's policy of suppressing dissent.
The Libyan leader arrived on Tuesday in the Belgian capital Brussels, on what is his first official visit to Europe in 15 years.
Amnesty urged the EU leaders scheduled to meet him to send "a strong signal" that Libya must adopt European norms for human rights.
It also hoped there would be more co-operation between Libya and Europe to relieve the plight of illegal immigrants, thousands of whom use Libya as a transit point on the dangerous journey into the EU.
The visit marks the latest stage in Libya's rapid return to the international community after years of being derided as a sponsor of international terrorism.
The thaw with the UK and US followed Libya's decision to renounce weapons of mass destruction, a move which Washington and London see as a consequence of the war in Iraq.