Libya rebels get $15bn boost as Kadhafi voices defiance

PARIS (AFP) - World leaders unlocked 15 billion dollars in funds Thursday to help Libya's victorious rebels rebuild the war-torn country as fugitive strongman Moamer Kadhafi issued a new barrage of threats.

Forty-two years to the day since Kadhafi stormed to power in a coup, senior envoys from over 60 countries met the leaders of the revolution that overthrew him to endorse the fledgling regime and offer practical support.

But, in their meeting in Paris, they also put the leaders of the National Transitional Council on notice to pursue a path of reconciliation, despite Kadhafi's latest message of defiance from his desert hiding place.

The Elysee Palace guest list was a victory in itself for the NTC, as once sceptical Russia and China and Libya's reluctant neighbour Algeria agreed to extend their backing to the new government.

It was French President Nicolas Sarkozy, the rebels' most prominent backer from the outset, who made the announcement that 15 billion dollars of Libyan overseas assets which had been frozen would now be unblocked.

"Around 15 billion dollars have been immediately unfrozen," he said.

But, speaking alongside the rebels' leader, he also urged the NTC to begin a "process of reconciliation and forgiveness."

NTC president Mustafa Abdel Jalil said the Libyan people had "proved their courage and their determination" to the international community in their fight to topple Kadhafi but he also pleaded for stability.

"Now everything is in your hands," he said in a message to the Libyan people. "It's up to you to accomplish what we promised: stability, peace and reconciliation."

The rebels have issued an ultimatum for Kadhafi and his followers to surrender, amassing troops around his hometown of Sirte for a final battle.

At the Paris conference, NATO Secretary General Anders Fogh Rasmussen said the alliance would continue its six-month operation in Libya for as long as the civilian population was in danger.

Kadhafi, who might once have marked the coup anniversary with a triumphant speech, was reduced to releasing his latest bluster on tape, vowing: "We will not surrender. We are not women and we are going to keep on fighting."

While the mood in Paris was upbeat, US Secretary of State Hillary Clinton sounded a note of caution, urging the rebels to beware extremism in their own ranks and prevent weapons from falling into the wrong hands.

"The international community, led by the UN, needs to help the Libyan people and its leaders pave a path to a sustainable, inclusive democracy that banishes violence as a political tool and promotes tolerance," she said.

UN chief Ban Ki-moon said he would work with the Security Council to agree terms for an immediate United Nations mission to deal with a possible humanitarian crisis and help rebuild the state.

"Our most immediate challenge is humanitarian," he said.

"Roughly 860,000 people have left the country since February, including skilled guest workers. Public services are under severe strain, including hospitals and clinics ...There is a major water shortage."

Russia -- which opposed NATO's military support for the rebels' battle to overthrow him -- said it recognised the NTC as Libya's "ruling authority".

China, which also had reservations about the air campaign, did not go so far, but said it "respects the choice made by the Libyan people and attaches importance to the significant position and role played by the NTC.

However continental heavyweight South Africa was among those continued to snub the NTC. President Jacob Zuma boycotted the talks and said he was "not happy" with NATO's campaign.

The African Union has not yet recognised the NTC and the head of the bloc's executive branch said he wanted guarantees black African migrants in Libya would not face reprisals.

"The NTC has given us assurances about the African workers in Libya. We're waiting to see," AU commission president Jean Ping said.

The Algerian turnabout may prove of more immediate practical help in cutting off a potential Kadhafi escape route.

Libya's larger neighbour has been accused of supplying Kadhafi with arms and, after members of the fallen leader's family fled there, it was seen as a likely escape route for the strongman and his loyal sons.

But Algeria's Foreign Minister Mourad Medelci welcomed the NTC promise to set up a "government representative of all regions" and added: "When it has done so, we'll recognise it."

The talks began against the backdrop of a new Kadhafi rant in which he urged his supporters to keep up their resistance to the rebellion.

"Even if you cannot hear my voice, continue the resistance," he said, in a message from a secret location. Kadhafi and his son Seif al-Islam have gone underground since rebels stormed into Tripoli on August 20.

"If they want a long battle, let it be long. If Libya burns, who will be able to govern it? Let it burn," declared Kadhafi.

Rebel officials say Kadhafi may be in the town of Bani Walid, south of the capital and still held by loyalist troops, but other reports suggest he could be in his hometown Sirte or Ghadames, near the Algerian border.