Clinton says Gaddafi must go

Secretary of State Hillary Clinton gestures during a news conference after her speech at the United Nations Human Rights Council in Geneva February 28, 2011.

GENEVA (Reuters) - Secretary of State Hillary Clinton accused Libyan leader Muammar Gaddafi on Monday of using "mercenaries and thugs" to suppress a popular uprising as world leaders sought new ways to isolate and oust him.

"We have seen Colonel Gaddafi's security forces open fire on peaceful protesters. They have used heavy weapons on unarmed civilians. Mercenaries and thugs have been turned loose to attack demonstrators," Clinton said.

"Through their actions, they have lost the legitimacy to govern. And the people of Libya have made themselves clear: It is time for Gaddafi to go -- now, without further violence or delay," she told the U.N. Human Rights Council in Geneva.

Many of the world's foreign ministers, in Geneva for a high-level session of the Council, discussed steps to pressure Gaddafi, whose violent bid to crush a two-week-old revolt against his 41-year rule has sparked international outrage.

European nations, who buy most of Libya's oil exports, mulled the idea of temporarily freezing payments to avoid having money get to Gaddafi's regime and Australia was among those calling for a no-fly zone over the North African nation.

Clinton said exile was one option for Gaddafi, but he must still be held accountable for the violence of the crackdown.

"We want the violence to end. If the violence could be ended by his leaving and ending the killing of so many people who are trying to assert their rights, that might be a good step," she said. "But of course, we believe accountability has to be obtained for what he has done."

DEPLOYING TOOLS

U.S. officials say United Nations and other sanctions on Gaddafi and his core supporters may "peel off" the Libyan strongman's remaining allies and seal his political fate.

World leaders have repeatedly denounced Gaddafi's use of force against civilians and urged him to quit, but have been slow to take concrete action, constrained until expatriate workers were evacuated from Libya.

The U.N. Security Council voted on Saturday for an arms embargo and other sanctions targeting Gaddafi and his inner circle, and referred the crackdown to the International Criminal Court in the Hague.

President Barack Obama has already announced U.S. sanctions and on Saturday said it was time for Gaddafi to step down.

Britain has revoked Gaddafi's diplomatic immunity and several states have frozen family assets. The European Union on Monday approved a package of sanctions including an arms embargo and bans on travel to EU states.

NO-FLY ZONE?

Australian Foreign Minister Kevin Rudd said his government would ask the United Nations to approve a no-fly zone.

Clinton said all options are on the table for further steps. But some U.S. officials have expressed concern a vote on a no-fly zone could be harder to secure at the Security Council where veto-wielding members Russia and China may resist.

Asked if he had discussed a no-fly zone in his meeting with Clinton, Russian Foreign Minister Sergei Lavrov was adamant.

"Absolutely not. It was not mentioned by anyone," he told reporters.

Still, EU foreign policy chief Catherine Ashton told reporters that a no-fly zone was under discussion, and Clinton described it as "an option we are actively considering."

"I discussed it today with allies and partners and we will proceed with this active consideration," Clinton said.

Earlier, British Foreign Minister William Hague told a news conference that to work, a no-fly zone would need clear international support as well as the means to enforce it.

He said Britain was "very sympathetic" to the idea of freezing oil purchase transfers for 60 days as a way to stop money from reaching Gaddafi. "That proposal, if it can be worked out successfully, could be part of that," he said.

A senior U.S. official, speaking on condition of anonymity, said such a move could have a significant impact on Gaddafi.

"If the Europeans are willing to take the lead on that, that would be very consequential ... If they choose to go down that path and potentially put the funding into an escrow account for the Libyan people that would be a strong message," the U.S. official said.

In a news briefing, Clinton said it was critical that any additional pressure on Gaddafi not harm the Libyan people.

"We are very aware of the need to block access to resources and assets that the Libyan government and particularly Gaddafi and his family could get a hold of to continue his reign of violence against the Libyan people," she said.

(Additional reporting by Stephanie Nebehay and Laura MacInnis; Editing by Jon Boyle)