Libya contact group agrees to fund rebels in Rome

REUTERS - The NATO-backed coalition against Muammar Gaddafi said on Thursday it would create a fund for rebels running short of supplies and money, as the Libyan leader’s forces pounded a rebel town in the west.

Italy, host of a meeting in Rome of the “Contact Group” on Libya, said the temporary special fund would aim to channel cash to the rebel administration in its eastern Libyan stronghold of Benghazi.

Special reports: Libya LIBYA - SPECIAL REPORT From the front line: Libya's rebel army gains confidence

A rebel spokesman in rebel-held Zintan, south-west of the Libyan capital, said pro-Gaddafi forces had fired about 50 Russian-made Grad rockets into the town so far on Thursday.

The spokesman, called Abdulrahamn, said the first salvo landed at about 6:45 (0445 GMT). There were no immediate reports of casualties, the spokesman said.

While the fighting has generally descended into a stalemate, the rebel Transitional National Council (TNC), which has been recognised by France, Italy and Qatar, has appealed for loans of up to $3 billion as it seeks to tip the balance.

But efforts to unblock Libyan state assets frozen in overseas accounts, or to allow the rebels to get past U.N. sanctions that prevent their selling oil on international markets, have been held up.

“We’ll be discussing a financial mechanism, we’ll be discussing other forms of aid,” U.S. Secretary of State Hillary Clinton said at a joint news conference with Italian Foreign Minister Franco Frattini.

“I will be formally announcing our non-lethal assistance so I think that there is an effort with urgency to meet the requests that the TNC is making,” she said.

Thursday’s meeting brings together foreign ministers from more than 20 countries including France, Britain, the United States, Italy and Qatar as well as representatives of the Arab League and the African Union.

Mahmoud Shammam, chief spokesman for the transitional council, has said the rebels urgently need $1.5 billion to cover immediate running costs.

“We need this for medical supplies, for food supplies, to keep the minimum functions of normal life—electricity, running hospitals etc,” he said on Wednesday.

Other rebels have spoken of needing $2 billion- $3 billion to try to shore up an administration created from scratch with no substantial sources of funding, and to pay the state salaries on which most people depend.

"No envelope of cash"

The meeting is not expected to address military issues but ministers are likely to restate their confidence in the NATO mission, despite a lack of progress since the initial airstrikes drove Gaddafi’s forces away from Benghazi in March.

Signs of impatience with the coalition’s lack of coherence have emerged. French President Nicolas Sarkozy is planning a separate conference of the “friends of Libya” in the coming weeks to discuss the future of the country.

Reporter's notebook in Libya REPORTER'S NOTEBOOK - LIBYA Sitting on the dock of the bay, waiting for the story

Of particular concern is the fate of civilians in the surviving pockets of resistance to Gaddafi in cities in western Libya such as Misrata and Zintan.

An aid ship defied shelling by Gaddafi’s forces to rescue more than 1,000 people from Misrata but was forced to leave behind hundreds of Libyans desperate to flee the fighting.

“The boat arrived safely this morning in Benghazi,” International Organisation for Migration spokeswoman Jemini Pandya said on Thursday.

Misrata’s port is a lifeline for the city, where food and medical supplies are low and snipers shoot from rooftops. In all about 13,000 people have now been rescued by 13 ships.

The IOM hoped to carry out a further evacuation mission, but this would depend on the security situation, Panyda said.

The United States on Wednesday condemned the continued shelling of Misrata and called on Gaddafi’s forces to permit the IOM to resume evacuating wounded people from the port.

The insurgents trying to topple Gaddafi after 41 years in power had hoped for a swift victory, akin to the ousting of the leaders of neighbouring Egypt and Tunisia by popular uprisings.

But his better-equipped forces halted the rebels’ westward advance from Benghazi, and the front line is now largely static.

The United States, Britain and France, leading a NATO air campaign, say they will not stop until Gaddafi is toppled.

Britain said it had expelled two more Libyan diplomats from London days after it ordered the country’s ambassador to leave.

“I ordered the expulsion of the two diplomats on the basis that their activities were contrary to the interests of the UK,” Foreign Secretary William Hague said.
On Sunday, Libyan ambassador Omar Jelban was given 24 hours to leave Britain after the British government said its embassy in Tripoli had been attacked.

The attack on the British mission followed a NATO air raid on Tripoli that the Libyan government said had killed Gaddafi’s youngest son and three of his grandchildren.