WRAPUP 5-Libyan rebels blame West for lack of cash
* Insurgents, Gaddafi forces exchange fire near Nalut
* Rebel oil chief accuses West of failing to deliver
* Gaddafi vows to defeat NATO alliance
(Adds U.S. delivers aid to rebels, Libya TV on NATO bombs)
BENGHAZI, Libya, June 18 (Reuters) - Rebels waging a drawn-out war to oust Libyan leader Muammar Gaddafi have run out of money, their oil chief said on Saturday, and he accused the West of failing to keep its promises of urgent financial aid.
His comments came as cracks were appearing in the NATO alliance over its 3-month bombing campaign against Gaddafi, with some allies showing mission fatigue and the United States accusing some European allies of failing to pull their weight.
The rebels have made several gains in the past few weeks, but remain far from seizing their ultimate prize -- Gaddafi's powerbase of Tripoli and its hinterland -- despite air support from the world's most powerful military alliance.
"We are running out of everything. It's a complete failure. Either they (Western nations) don't understand or they don't care. Nothing has materialised yet. And I really mean nothing," rebel oil chief Ali Tarhouni said in an interview with Reuters.
At least eight rebels were killed in fighting near the northwestern town of Nalut, a rebel source said, as insurgents sought to press an advance into Gaddafi's heartland that has proven slow despite weeks of NATO air strikes on their behalf.
The gun battles in the village of Takut, just outside Nalut, on Saturday followed exchanges of heavy artillery fire near the city of Zlitan, on the other side of Tripoli, as the insurgents tried to take government-held territory to the east of the city.
Interview with rebel oil minister [ID:nLDE75H07B]
More on Libya [nLDE72H00G]
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Libya graphics link.reuters.com/neg68r
Tarhouni's remarks highlight the insurgents' struggle to make ends meet, with war damage to energy infrastructure in their eastern territory having knocked out oil production there.
Western powers have pledged to expand aid by tapping into Libyan assets frozen abroad. But Tarhouni, also the insurgents' finance minister, said they had not followed through.
"All of these people we talk to, all of these countries, at all these conferences, with their great grand speeches -- we appreciate (them) ... but in terms of finances they are a complete failure. Our people are dying," he said.
The economy in eastern Libya, where much of the oil that once made Libya a major OPEC exporter came from, is in a shambles. Rebel leaders struggle to pay for military operations and salaries in a society where, thanks to the legacy of Gaddafi's centralised rule, most people rely on state wages.
The European Union has pledged financial infusions and the United States, which took a leading role in securing a U.N.-backed no-fly zone over Libya, has promised more aid.
The U.S. government said in a press release late on Saturday that it had "delivered a second shipment of non-lethal aid to Benghazi" which was requested by the rebels, including body armour, uniforms and first aid kits, two days ago.
Tarhouni has estimated the rebels were spending up to 100 million Libyan dinars ($86 million) per day.
"I don't expect us to produce oil any time soon. The refineries have no crude oil, so they are not working," he said.
The president of the rebels' transitional council, Mustafa Abdel Jalil, was in the Tunisian capital on Saturday for talks with Tunisian government officials.
Tunisian Prime Minister Beji Caid Sebsi's government has made welcoming overtures to the rebels but has stopped short of officially recognising them.
"We've gone past that stage," Jalil told Reuters after a news conference. "The fact that we are received here is implicit recognition. Tunisia will play a big role in the future."
The rebels are trying to seal off coastal Tripoli from the east, west and south but their advances have been halting and weeks of NATO strikes pounding Gaddafi's compound and other targets have failed to bring down his 41-year-old rule.
"The battles started yesterday and are continuing today in Takut," a fighter, Abou Saa, told Reuters from Nalut, in arid hills some 200 km (125 miles) southwest of Tripoli.
"The revolutionaries destroyed six armoured vehicles and killed more than 45 enemy soldiers. The rebels surrounded Gaddafi's forces, who are holed up in a compound (in Takut)."
He added that 13 rebels were wounded in the fighting.
The report could not be immediately verified due to a lack of independent media access to the area, and there was no immediate comment from Gaddafi's side.
On the other side of Tripoli, rebels are advancing towards Zlitan, 160 km (100 miles) to the east and the next major town on the Mediterranean coastal road to the capital from the rebel stronghold of Misrata. Capturing it would greatly advance the rebels' strategy of cutting off Tripoli from all sides.
Gaddafi's forces periodically fired rockets into the port and refinery area of Misrata on Saturday, killing one woman, her neighbour Ali Salah told Reuters in the city.
The rebels have said they will not attack Zlitan because of local tribal sensitivities, but are recruiting fighters from the town and waiting for the residents to rise up against Gaddafi.
Rebels are also fighting on another front, in the east near the oil port of Brega, 800 km (500 miles) east of Tripoli.
NATO planes resumed bombardments of Tripoli on Friday and there were more explosions on Saturday. State news agency Jana said another bombing had struck the Karama district of Tripoli.
Libyan TV said another bombardment hit the Khallat al-Farjan area of Tripoli and Al Ghayran, 100 km to the south of the capital. Neither claim could be independently verified.
"The alliance will be defeated," Gaddafi said in an audio speech on Libyan television on Friday. "We are in our country and we are determined to stay and defend it."
Libyan Prime Minister Al-Baghdadi Ali Al-Mahmoudi told a news conference that Libya would appeal to the U.N. Security Council for a halt to NATO's aerial bombings, which he said were increasingly hitting civilian buildings.
A NATO spokeswoman called Libyan reports of civilian casualties caused by air strikes "pure propaganda".
"It is Gaddafi and his regime that have been ..., shelling cities, mining ports and using mosques and children's parks as shields," said alliance spokeswoman Oana Lungescu.
A statement from NATO acknowledged that its aircraft had mistakenly bombed a column of rebel vehicles in eastern Libya on Thursday and said it regretted any casualties. The opposition has said 16 of its fighters were wounded in the incident. (Additional reporting by Tarek Amara in Tunis, Nick Carey in Tripoli, Matt Robinson in Dafniyah, Joseph Nasr in Berlin, and Sylvia Westall in Vienna; writing by Tim Cocks; editing by Mark Trevelyan)
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