November 7, 2014 / 12:09 AM / 3 years ago

Exclusive: U.S. weighs sanctions on Libyan factions to halt proxy war

Libyans celebrate after the Supreme Court invalidated the country's parliament, at Martyrs' Square in Tripoli November 6, 2014.Ismail Zitouny

WASHINGTON (Reuters) - The United States is considering imposing sanctions on Libya's combative factions to prevent a proxy conflict fueled by regional powers from erupting into full-blown civil war and to force militant leaders to negotiate, U.S. officials said.

Three years after Muammar Gaddafi's downfall, outside intervention has exacerbated the fighting, with Qatar and, to some degree, Turkey supporting Islamist-linked forces and Egypt and the United Arab Emirates backing more secular rivals.

U.S. sanctions would be separate from potential United Nations sanctions that aim to pressure Libyan factions and militias to take part in U.N.-backed political negotiations to be led by U.N. envoy Bernardino Leon.

The possibility of using U.N. sanctions to help bring about political talks has been aired publicly. The consideration of separate U.S. sanctions has not been previously disclosed.

U.S. officials declined to say whom they might target with sanctions or why they felt it necessary to look at U.S. penalties separate from the United Nations. Nor would they detail what sanctions they would propose.

If applied, the United Nations sanctions would target individuals or groups involved in the fighting, rather than their foreign backers, and would freeze their assets as well as impose travel bans.

Libya is in chaos with two rival governments and parliaments struggling for power and control of its oil wealth.

The western part of the country is controlled by militants with Islamist links who call themselves Operation Dawn and who seized the capital, Tripoli, in August. This group has reinstated the previous parliament and established its own government.

The government that internationally recognized is in charge of a rump state in the east, whose parliament operates out of a hotel in Tobruk. In a ruling likely to deepen divisions, the Supreme Court on Thursday declared this parliament unconstitutional.

In the latest sign of upheaval, a Libyan rebel group that previously seized oil ports to press its demand for regional autonomy said on Friday it would declare independence in the east if the world recognized the rival parliament in Tripoli.

Separately, Britain, Canada, France, Germany, Italy, Malta, Spain and the United States issued a statement urging all sides to end "military operations and to refrain from taking any steps which increase the polarization and divisions in the country."

Why u.s. Action?

While U.S. officials would not discuss the reasoning for unilateral sanctions, there are at least two possibilities.

First, if the United Nations moves slowly or not at all, U.S. penalties could be imposed whenever Washington wished.

Second, U.S. sanctions could be especially worrisome to Khalifa Haftar, a former Libyan army general who fled to the United States after breaking ranks with Gaddafi and returned to launch a campaign against the Islamists in Benghazi.

Western officials say the involvement of outside powers such as Egypt and the UAE is exacerbating the conflict and that the two countries are arming and funding the more secular forces.

Haftar, according to Western officials, has become the major proxy in Libya for Egypt, whose military-dominated government regards extremists on its border with Libya as a primary national security challenge.

The UAE sees Egypt's leadership as a firewall against militants and has given Cairo financial and military support, U.S. and allied officials say.

Saudi Arabia, a supporter of Egypt's leader, General Abdel Fattah al-Sisi, is sympathetic to the Egyptian and Emirati involvement in Libya but is not believed to have played any direct role, diplomats said.

Supporting Libya's Islamists, including some elements that the United States views as dangerous extremists, are Qatar and Turkey. Qatar, officials said, has given arms and money to Islamist militias while Turkey has offered moral support.

While acknowledging regional fears Libya may become a magnet for militants, a U.S. official said Washington believed outside interference may create "the very kind of conflict ... that will invite negative elements into Libya rather than keep them out."

Reporting by Mark Hosenball and Arshad Mohammed; Additional reporting by Lou Charbonneau; Editing by David Storey, Howard Goller and Steve Orlofsky

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