Muammar Qaddafi's regime has condemned U.S. plans to unblock billions of dollars of frozen Libyan assets in the United States and give them to the NATO-backed rebels who are fighting Libyan government forces.
U.S. Secretary of State Hillary Clinton told representatives of the Libya Contact Group meeting in Rome on May 5 that the Obama administration would try to pass legislation to unblock the frozen Libyan assets and hand them to the rebels.
The U.S. is reported to have frozen about $30 billion in Libyan assets since the Libyan conflict began in February.
The rebels have seized eastern Libya, but are short of money and are locked in a military stalemate with Qaddafi's forces.
Khaled Kaim, deputy foreign minister in Qaddafi's government, said unfreezing such assets and giving them to the rebels would amount to "piracy". He said it would be "illegal" to pursue such a course of action and that it would undermine the global financial system.
"I am sure that the regulators in those countries, especially in...the United Kingdom and the United States, they wouldn't allow such a move from their government," he told reporters in Tripoli.
"Even the parliaments in those countries, they wouldn't allow it. Otherwise, the world would be chaotic and if we stay silent about it, then I think we would be living in a jungle."
Kaim also denounced the rebels, saying they are neither a legal entity nor a country.Agreement Reached On Funding Rebels
Hillary Clinton made her announcement about unfreezing Libyan assets after countries involved in the NATO-led military campaign in Libya agreed to set up a fund for rebels fighting Muammar Qaddafi's regime.
The agreement came at a Libyan Contact Group meeting in Rome on May, which brought together foreign ministers from NATO members Britain, France, Italy, and the United States, with some 20 countries and six international organizations, including the Arab League, and the African Union.
Top officials of the Libyan rebels' Transitional National Council also attended.
Italian Foreign Minister Franco Frattini told the gathering that the new financial instrument, dubbed the Temporary Financial Mechanism, "will permit funds to be channeled effectively and transparently" to the Libyan opposition.
The decision was welcomed by the co-chairman of the meeting, Qatari Prime Minister Sheikh Hamad bin Jassim Bin Jabr al-Thani.
"As you know the Libyans have a lot of funds seized [abroad] and these funds could be used through credits to bring the needs of the people," al-Thani said.
"So I don't think we have shortage of money. We had a shortage of mechanism and now we agreed on the mechanism. That's what is important."Pressure On Tripoli To 'Intensify'
U.S. Secretary of State Hillary Clinton said Washington hoped to change the law to help the rebels.
Besides donations and loans from the international community, the fund is to receive Libyan state assets frozen in overseas accounts -- estimated at around $60 billion for the European Union and United States.
Efforts to unblock such assets or to allow the rebels to get past United Nations sanctions that prevent their selling oil on international markets have been held up so far.
Italy's Frattini recognized that the unblocking of assets was a "very serious problem," adding that his country and France had urged the European Union "to seek a solution."
And U.S. Secretary of State Hillary Clinton said the Obama administration hoped to change the law to allow it to tap portions of the frozen Libyan assets in the United States.
She said Washington was also working to facilitate oil sales by the opposition.
French Foreign Minister Alain Juppe said the new fund could be operational within weeks, and that Paris was evaluating its possible contribution. He added that more work was needed to free up Libyan assets held abroad.
British Foreign Secretary William Hague told reporters the meeting would "intensify" pressure on Tripoli.
"We are looking at how to tighten the economic pressure on the Qaddafi regime, including exploring action to prevent them from exporting crude oil or importing refined products that are used for non-humanitarian purposes," he told reporters after the meeting.
Earlier, however, Britain had already said it has no plans to contribute to the fund for the Libyan rebels because it had already made a "very substantial" contribution to humanitarian assistance.
Rebel spokesman Mahmud Shammam said the rebels needed at least $2 billion in urgent funding. He said they only had enough funds to pay for immediate needs in food, public salaries, and medicine until the end of this month.
In Tripoli on May 5, the Libyan government dismissed the announcement of funds for rebels, saying that "the world needs to listen to the tribes of Libya, not to the people meeting in Rome."
Government spokesman Mussa Ibrahim said calls for the departure of Libyan leader Muammar Qaddafi are "morally wrong."Stalemate In Fighting
The Rome gathering -- the second meeting of the Libya Contact Group after a gathering in Qatar last month -- comes amid a stalemate in a conflict that has already killed 10,000 people, according to the rebels.
Rebel fighters run across a street in the besieged city of Misurata on April 23.
The meeting is being held against the backdrop of heavy fighting in and around the city of Misurata, seven weeks after the beginning of the NATO air campaign.
Meanwhile, the humanitarian situation is worsening, particularly in the hotspots of the besieged city of Misurata and the Western Mountains region.
A ship carrying 800 migrants and local civilians, some of them injured, from Misurata docked in the main rebel city of Benghazi today.
One of them told Reuters that the city was heavily shelled by Qaddafi's forces.
"The fact that I managed to get out safely with my family plus a few hundred others just seemed like quite miraculous at the time when the port of Misurata was under heavy shelling by Qaddafi's forces," he said.
Calls For Political Solution
Misurata is the only substantial city still held by rebels in western Libya. Rebels hold much of the east of the country, around Benghazi, while Qaddafi holds most of the west.
Ahead of the talks, some NATO countries appeared to be losing patience with the stalemate.
German Foreign Minister Guido Westerwelle, whose country is not taking part in the NATO air strikes, stressed the importance of finding a "political solution" to the conflict in Libya, saying, "The limits of military [intervention] are visible."
On May 4, France's Juppe said the military intervention must end "as rapidly as possible," and expressed hope that the conflict would not last "more than a few weeks, at the most months."
Meanwhile, Italian lawmakers called for the Italian government and its allies to work out an endgame for the air strikes within a "certain time frame," and demanded that the government seek an immediate diplomatic solution to the conflict.
But any progress is unlikely as long as the rebels' key demand -- Qaddafi's ousting from power -- is not met.compiled from agency reports