ROME — The Obama administration announced Thursday that it will seize a small chunk of the billions of dollars in frozen Libyan assets in U.S. institutions and use it for humanitarian aid in Libya, in what officials called a fresh signal to the country’s leader, Moammar Gaddafi, that his resources are imperiled.
The move was disclosed by Secretary of State Hillary Rodham Clinton at a meeting here of Arab and NATO countries, which was called to show support for Libyan rebels, who have been trying to topple Gaddafi for three months.
The 22 countries in attendance also agreed to set up a fund to manage donations to help the rebel-controlled areas. Kuwait has pledged $180 million, and Qatar said it would contribute at least $400 million more.
The event marked a deepening of the international commitment to the Libyan opposition, and Mahmoud Jibril, a top official in the rebels’ transitional government, said the funds pledged were “a good start.”
Still, although the amounts to be made available to the rebel leadership are not clear, the results appeared to fall short of rebels’ hopes for pledges of $2 billion to $3 billion in loans and aid. They have said that they are running perilously short of money to buy gasoline, medicine and food and to pay government salaries in the areas they control.
Jalal el-Gallal, a rebel spokesman, said Thursday that the funds would not be used to buy weapons. “The main thing is to make sure that the economy is kept afloat, that the requirements for food and medicine are met, and needs are supplied for the 2 million-plus people in the liberated area,” he said.
Rebels in Benghazi, their stronghold in the east, and the western city of Misurata have requested assistance.
Libya has become a test case of international resolve to prevent widespread killing by a government facing the anti-dictatorial fervor sweeping the Middle East. A NATO bombing campaign that began nearly seven weeks ago has bolstered the rebels, allowing them to hold on to eastern Libya and Misurata in the face of superior firepower. But the two sides are increasingly bogged down in a stalemate.
NATO and its allies are trying to crank up the pressure on Gaddafi through intensified military strikes, tighter enforcement of economic sanctions and support for the rebels.
“We urge all our partners to join in increasing the pressure on Gaddafi, to sharpen the choice for him and those around him, and to provide much-needed support to the opposition,” Clinton said at a closed-door session with senior diplomats, according to a transcript provided by her staff members.
Qatar’s prime minister, Hamad bin Jasim al-Thani, said that what was lacking was not a will to donate. “What we had a shortage of is a mechanism. And now we have a mechanism” to ensure donations are handled properly, he said at a news conference. The fund will be overseen by Libyan rebel officials as well as authorities from Qatar and Europe.
At a news conference in Tripoli early Friday, a Libyan official said it was not justifiable under international law or under the laws of countries such as the United States, Britain and France to take a nation’s assets and give them to an opposition group.
“Libya is still, according to international law, a sovereign state,” Deputy Foreign Minister Khaled Kaim said. “Any use of the frozen assets is like piracy on the high seas.”
“The credibility of the international financial system would be endangered by this,” he added, saying that other countries would not invest in Western nations if they feared their assets could be seized for political reasons “after any internal unrest.”
Clinton told journalists in Rome that “there is an effort, with urgency, to meet the request” for funds from the rebels’ coordinating body, the Transitional National Council. But she urged patience.
The Obama administration will seek to pass legislation to tap more than $150 million in Libyan assets frozen under U.N. sanctions passed in February. Although congressional leaders have shown early signs of being receptive, the bill could take weeks to become law, officials said.
The money is a small part of the $30 billion in assets belonging to Gaddafi and his government that U.S. authorities have frozen. But some of that money is in American banks overseas, making it more complicated to use.
The administration will work with Congress to decide who will get the money, which is “a substantial sum” in a lightly populated country, a senior State Department official said, briefing reporters on the condition of anonymity. The funds will be used for humanitarian needs and probably not go directly to the rebels, officials said.
The rebels’ political leaders had initially hoped that foreign governments would provide them with the frozen overseas assets belonging to Gaddafi and his government. But several European countries expressed concern that such a transfer would violate their laws. The rebels now hope to borrow abroad, using the blocked assets as collateral.
Clinton also called on other countries to follow the U.S. example in providing nonlethal aid to the rebels. The Obama administration is sending about $25 million worth of equipment from U.S. military stocks — such as tents and body armor — which should arrive in Benghazi “in the coming days,” Clinton said.
In cash-strapped Benghazi, services that used to be paid for with public funds are now provided by volunteers. On a street near the rebels’ seafront headquarters Thursday, young men wearing fluorescent yellow bibs over their jeans and T-shirts and blue surgical masks were gathering trash.
Ause Sultan, 22, who worked as a dentist before the uprising, said he spends every Thursday helping clear Benghazi’s streets of plastic bags and discarded cans. The group was formed by word of mouth, he said, not the rebel council.
“When we started, people came and asked to join,” he said.
Correspondent Simon Denyer in Tripoli and special correspondent Portia Walker in Benghazi contributed to this report.