We investigate 't Hooft-Mandelstam monopoles in QCD in the presence of
a single classical instanton configuration. The solution to the maxim
al Abelian projection is found to be a circular monopole trajectory wi
th radius R centered on the instanton. At zero loop radius, there is a
marginally stable (or flat) direction for loop formation to O(R(4)lnR
). We argue that loops will form, in the semiclassical limit, due to s
mall perturbations such as the dipole interaction between instanton-an
ti-instanton pairs. As the instanton gas becomes a liquid, the percola
tion of the monopole loops may, therefore, provide a semiclassical pre
cursor to the confinement mechanism.