The alliance had at first denied the strike, saying it had not conducted any recent operations in the area of Surman, about 65 kilometers west of the capital, Tripoli.
The Libyan government said NATO bombs struck Khoweidi al-Hamidi's compound, killing 15 people, including at least two of his grandchildren and his wife.
It said al-Hamidi - a member of Libya's Revolutionary Command Council, led by Gadhafi - escaped unharmed. The influential insider took part in the 1969 coup that brought the Libyan leader to power. His daughter is married to one of Gadhafi's sons, Saadi Gadhafi.
NATO said it could not confirm the deaths. The latest Libyan accusation comes a day after NATO acknowledged that an airstrike by its forces may have killed civilians in the Libyan capital.
Meanwhile, Chinese state media say Mustafa Abdel-Jalil, head of the rebel Transitional National Council, arrived in Beijing on Tuesday for a two-day visit.
China held talks earlier this month with an envoy from Gadhafi, and Chinese diplomats have met with anti-Gadhafi rebels in Benghazi
Also Monday, more than 20 troops loyal to Gadhafi defected from a brigade based in southern Libya and joined the anti-government opposition. Four of the men spoke to reporters in the eastern rebel stronghold of Benghazi, saying they had escaped from a pro-Gadhafi unit based near Libya's border with Chad.