Libyans fear showdown as eastern commander eyes capital

TUNIS (Reuters) - Forces from eastern Libya who have swept through the south and taken control of remaining oilfields in recent weeks have now reinforced a base in the centre of the country and signalled to the capital Tripoli that it may be next.

The United Nations, stunned by the southern advance, is scrambling to mediate between eastern commander Khalifa Haftar and Tripoli's internationally-recognised government led by Prime Minister Fayez al-Serraj, Western diplomats say.

They fear it may be the last U.N. attempt to unify the rival administrations and end the chaos that followed the overthrow of Muammar Gaddafi in 2011 with free elections.

Haftar, a 75-year-old former general, is increasingly taking the situation into his own hands, backed by the United Arab Emirates and Egypt, which see him as a bulwark against Islamists and the man to restore order.

He has not said whether he wants to march on Tripoli, which would dramatically escalate tensions. But his Libyan National Army (LNA) has hinted heavily that it might do so -- if Haftar is not recognised as the country's overall military commander, his aim since he began assembling the force in 2014.

"Some military sources say the LNA will move towards Tripoli after the announcement that the south has been secured," read an item on an LNA website. 

"The same sources said there is coordination with some units inside Tripoli and its suburbs for the army to enter Tripoli."

The LNA spokesman said a purported order from Haftar for troops to move, seen by Reuters and publicised by his supporters, was not genuine.

But the capital has been rife with rumours of invasion and residents have reported seeing young people driving around playing loud songs praising Haftar from their car radios.

While several LNA units returned this month to Benghazi, Haftar's power base, some units went to Jufra, a city in the desert straddling east and west, LNA sources say.

From there they could go home, or -- the implied threat according to diplomats -- move northwest towards Tripoli, should talks over power sharing and elections fail.

Haftar taps into fatigue among Libyans yearning for electricity, petrol and banknotes scarce in a country which once enjoyed some of highest living standards in the region.

For many, especially in the east, the general is the only one who can end fighting by myriad groups with ever-changing names. For his enemies in western cities and Islamists who were oppressed under the old regime, he is a new Gaddafi.

OIL

Haftar took the southern El Sharara and El Feel oilfields last month, completing a campaign which has given him effective control of the country's crude output of around one million barrels a day.

He does not, as yet, have the means to profit from them because oil exports are managed by the state oil firm NOC in Tripoli, which is working with Serraj.

But the situation on the ground is changing fast.

U.N. envoy Ghassan Salame visited the main southern city Sabha just one day before some 80 LNA vehicles drove in through the desert from the east, and Haftar's growing clout was on show again this week.

The NOC agreed to reopen El Sharara, closed since rogue guards and tribesmen seized it in December, after the UAE called two meetings. The first was with Serraj and NOC chairman Mustafa Sanalla to agree on a security plan and the second was between the Tripoli premier and Haftar.

But while some communities in western Libya have signalled support for the LNA, it is far from clear whether Haftar would be able to muster enough.

The LNA says it has 85,000 men but this includes soldiers paid by the central government who it hopes to inherit. Its elite force, Saiqa (Lightning) numbers some 3,500, while Haftar's sons also have well-equipped troops, LNA sources say.

Diplomats say much of the LNA is an umbrella of less trained ex-Gaddafi soldiers, tribesmen and Salafists as well as Sudanese and Chadian fighters; the LNA denies this.

Thanks to covert UAE and Egyptian support documented by the U.N., Haftar has gradually built up superiority since 2014, allowing him to stop Tripoli flying in reinforcements during his southern campaign and pressure the NOC by closing airstrips on oilfields.

Serraj has no real troops -- depending on armed groups who control many of the buildings his ministers work in and who, Tripoli residents say, regularly demand business contracts.

His only asset is his official title and access to state funds, though Western powers have increasingly embraced Haftar - with Italy, for example, addressing him as (Field) Marshal, his official title.

There has been some Western support for Haftar. French special forces in conjunction with Britain and the United States had been advising the LNA during the Benghazi campaign.

On Monday, Serraj unexpectedly praised cooperation with Haftar, saying they needed to work together, in a speech to western mayors just after rumours of approaching LNA troops first surfaced.

Haftar and Serraj could agree to a new transitional government, which would help the commander steadily entrench his power without invading Tripoli.

But it is unclear whether Haftar's supporters would agree to putting him under civilian control as proposed by Western and U.N. mediators.

"There is no reconciliation with Serraj for power because talks are not with him but with people behind him who do not want Haftar," said Hamad Bandaq, a lawmaker in the eastern parliament.

OFFENSIVE

The biggest obstacle for Haftar is Misrata, a western city home to forces which could at least partly match LNA ground troops, analysts say.

The city is known for a spirit of resisting old regime figures, developed during 2011 when Gaddafi forces besieged it for three months.

Weeks after Haftar started his Benghazi campaign in 2014 Misrata forces moved on Tripoli, expelling a government allied to a Haftar partner in one-month battle that split Libya. The main motive was fear of a Haftar coup.

There have been belligerent comments from Misrata residents in recent days but it is unclear whether they would fight.

"A mix of conflict fatigue, cautiousness and internal divide has so far forestalled a military mobilisation," said Emad Badi, a Libya researcher. "However that could change very quickly."

Tarek Megerisi, a policy fellow at the European Council, said Serraj and Haftar could agree on a transitional government, with the commander steadily entrenching his power without actually invading Tripoli.

Haftar and the UAE have put out feelers to Tripoli forces, and diplomats hope Haftar will agree to negotiate as he needs access to NOC cash after stretching his resources to the limit with his sweep of the south.

The LNA used massive force in the three-year battle over Benghazi but applied a different tactic in the south.

It launched air strikes and battled over one town. But it relied on a small ground force, with less than 200 vehicles, which offered jobs, petrol and banknotes to towns mostly happy to see someone replacing the largely absent state.

At El Sharara, just a few dozen LNA cars arrived, negotiated with the guards and quickly struck a deal, celebrated by a commander flown to shoot a video with his new men.

(Additional reporting by Crispian Balmer; editing by Philippa Fletcher)