Libya contact group agrees to new fund to help rebels

The international contact group on Libya has agreed to set up a temporary fund to help rebel groups following urgent requests for financial assistance from rebels based in the eastern city of Benghazi.

The group representing NATO countries, Arab states and other nations, a total of 22 countries and six organizations, met in Rome to discuss ways to increase pressure on Libyan leader Muammar Gaddafi.

Italian Foreign Minister Franco Frattini said the creation of a new temporary fund would "permit funds to be channeled effectively and transparently" to the rebel groups in Libya. French Foreign Minister Alain Juppe said that the fund could be operational within weeks, the BBC reports

The rebels' Transitional National Council says it needs as much as $3 billion in the coming months for military salaries, food, medicine and other basic supplies, according to the BBC.

British Foreign Secretary William Hague said that financial assistance to the rebels would not be spent on weapons, but rather on basic services.

U.S. Secretary of State Hillary Clinton said the United States was trying to free more than $30 billion it had frozen in Libyan assets, “so we can make those funds available to help the Libyan people.”

However, there are complex legal issues involved in the unblocking of assets. Clinton said the United States will "pursue legislation that would enable the U.S. to tap some portion of those assets,” AFP reports.

"The United States is also working to facilitate oil sales by the opposition," Clinton said.

The Libya fund will at first receive donations and loans from the international community. The frozen assets — estimated at $30 billion dollars for the U.S. alone — will be used to finance the fund at a later date, AFP reports.

Also on Thursday, the U.S. named Libya’s state broadcaster and two government-controlled investment firms under its sanctions regime against the Libyan government in an attempt to increase pressure on Gaddafi.

The Treasury Department listed the Libyan Jamahiriya Broadcasting Corporation, which broadcasts on several channels in Libya and via satellite across the Middle East, under its sanctions regime, blocking any of its property and assets in the United States and banning Americans from doing business with them, AFP reports.