(by Sam Dagher and Richard Boudreaux, The Wall Street Journal, WSJ.com) BENGHAZI, Libya -With fresh gunfire erupting in and around Tripoli on Wednesday, Libya’s rebel leadership acknowledged that the battle to control the North African country is far from over, and offered a financial reward of more than $1 million for anyone who captures Col. Moammar Gadhafi.

Libyan leader Moammar Gadhafi

In Tripoli, forces loyal to Col. Gadhafi withdrew from positions around the capital’s premier hotel, enabling foreign journalists who had been trapped there for six days to leave.

A day after rebels celebrated their storming of Col. Gadhafi’s sprawling Bab al-Aziziya government compound in the capital, pro-regime snipers launched repeated attacks on rebels inside the compound, cut off the road to Tripoli’s airport, and fired at motorists near its port, the Associated Press reported.

Intense clashes also erupted in the Abu Salim neighborhood next to the Bab al-Aziziya compound, with Gadhafi loyalists firing shells and assault rifles at the fighters, the AP reported. Abu Salim, a working-class neighborhood, is home to a notorious prison and thought to be one of the last remaining regime strongholds within the capital.

The continued troubles bringing the country under control—primarily as well-trained Gadhafi loyalist forces continue to provide resistance in the capital and in areas to the east loyal to the longtime strongman—raise the specter of a longer conflict, or a pro-Gadhafi insurgency that will become a primary concern of a new Libyan leadership.

On Wednesday, the White House said the U.S. is seeking to free up $1.5 billion in assets frozen as a result of sanctions applied to Col. Gaddafi’s regime, funds that can help Libyan rebels pay for rebuilding the battle-scarred country. …

In Benghazi, rebels extended to the strongman the surprising offer of a conditional exit from the country.

“We realize that Moammar Gadhafi’s regime is not finished yet,” Mustafa Abdul Jalil, the head of the NTC, said during a press conference in the rebels’ eastern stronghold of Benghazi. “The matter won’t come to an end except when he’s captured dead or alive; we fear mayhem and destruction from him because these are his values, upbringing and practices.”

Mr. Abdul Jalil said an association of businessmen in Benghazi has earmarked a reward of two million Libyan dinars, or about $1.35 million, to anyone who captures Col. Gadhafi.

The rebel leader also pleaded with members of the strongman’s inner circle to either kill or capture him, promising that Libyan society would reward whoever does so with amnesty for past crimes. “Maybe a lesser evil prevents a greater evil,” he said.

Col. Gadhafi’s whereabouts remained unknown. The strongman issued a defiant radio address earlier in the day on local Al-Ouraba TV, calling on Libyan residents to “free Tripoli.”

The pro-Gadhafi TV channel also quoted the Libyan leader as saying he had left the compound in a “tactical move” after 64 NATO airstrikes turned it to rubble, according to news reports. He vowed martyrdom or victory in his fight against NATO aggression.

Mr. Abdul Jalil said swaths of the North African country were still firmly under control of Col. Gadhafi’s loyalists, especially in the area between coastal Sirte and the city of Sebha farther south in the interior.

In an interview with The Wall Street Journal, a rebel military spokesman said opposition fighters were now firmly in control of the coastal towns of Brega, Ras Lanuf and Sidrah, all home to strategic oil installations between Benghazi and Tripoli.

Col. Ahmed Bani said fighters were now on the outskirts of Ben Jawad near Sirte but that Col. Gadhafi has amassed formidable resistance inside Sirte and surrounding areas.

His assertions couldn’t be independently verified. …

[In Tripoli], journalists from CNN, Reuters, the Associated Press and other news organizations who had been effectively held hostages in the $400-a-night [Rixos] Hotel said they left in vehicles sent by the International Red Cross and were moving to other hotels. They had been through intermittent power blackouts, scarce water supplies and gunfire that had forced them to work and sleep in hallways and a windowless prayer room. …

More than 30 journalists had been trapped in the hotel, along with the Rev. Walter Edward Fauntroy, a civil-rights pastor and former U.S. congressman who is in Libya on a peace mission.

…………………

In Benghazi, Mr. Abdul Jalil said he doesn’t mind if Col. Gadhafi leaves Libya after he publicly relinquishes power to prevent a long and bloody showdown. He said Col. Gadhafi’s arrest warrant for crimes against humanity, issued by the International Criminal Court in June would then become a matter for the international community.

It wasn’t immediately clear whether other rebel factions agreed to such a dramatic concession, especially after their military gains in Tripoli over the past few days

Earlier, in remarks to France 24’s Arabic channel, Mr. Abdul Jalil said the NTC will move its headquarters from the eastern city of Benghazi to Tripoli on Thursday. “The NTC will be gradually moved to Tripoli as of the day after tomorrow,” he said.

More than 400 rebel fighters died and over 2,000 were injured in the fight for Tripoli, while short of 600 Gadhafi loyalists had been captured, he said.

Mr. Abdul Jalil, who once served as a justice minister in Col. Gadhafi’s regime and was among the first former Gadhafi officials to defect to the rebels’ side, said the new Libya “will hold special relations with all countries that helped in liberating the country.”

“I see Libya in the future as a Muslim, organized state and in control with peaceful and amicable ties with its neighbors,” he added.

Mr. Abdul Jalil is under pressure to show strong leadership and an ability to hold the country together, especially as his credibility was undermined when he announced that Col. Gadhafi’s son Seif al-Islam Gadhafi was in rebel custody. Late Monday, Seif al-Islam dealt an embarrassing blow when he defiantly appeared in front of members of the media at the Rixos Hotel.

—Alistair MacDonald, Corey Boles and Leila Hatoum contributed to this article.

Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved. Reprinted here for educational purposes only. Visit the website at wsj.com.

Questions

NOTE TO STUDENTS:  Final outcome of the fighting between ruler Moammar Gadhafi and rebels trying to oust him are still not known.  We are attempting to provide a general idea of what is going on in the country.  Do your best to get a general picture of the situation.

1.  How are Gadhafi loyalists reacting to the rebels’ takeover of Gadhafi’s compound?

2.  Why is there uncertainty about the future of Libya? (see para. 5, etc.)

3.  Why is the Obama administration attempting to free up $1.5 billion in Libyan assets frozen by sanctions on Gadhafi’s regime?

4.  How has Gadhafi reacted to the takeover of his compound and the demands that he surrender?

5.  What is former justice minister – turned rebel leader Abdul Jalil’s vision for the future of Libya?

CHALLENGE: Read the comments on the situation in Libya at defenddemocracy.org.  What is the main point of this analysis on Libya?

NOTE:  “Answers by Email” will resume September 6th.  Sign-up below.

Background

LIBYA:

  • The population of Libya is 6,461,454.
  • Ninety percent of the people live in less than 10% of the area, primarily along the coast.
  • More than half the population is urban, mostly concentrated in the two largest cities, Tripoli and Benghazi.
  • In practice, Libya is an authoritarian state.
  • Libya’s political system is in theory based on the political philosophy in Qadhafi’s Green Book, which combines socialist and Islamic theories and rejects parliamentary democracy and political parties.  (from state.gov/r/pa/ei/bgn/5425.htm)

REPORT ON LIBYA: (From Freedom House.org)

  • Libya was part of the Ottoman Empire until the Italian conquest and occupation of the country in 1911.
  • It achieved independence in 1951 after a brief period of UN trusteeship in the wake of World War II.
  • Until 1969, Libya was ruled by King Idris, a relatively pro-Western monarch.
  • A group of young army officers, led by 27-year-old captain Mu’ammar al-Qadhafi, overthrew the king’s government while he was traveling abroad.
  • Qadhafi argued that foreign oil companies were profiting from the country’s resources at the expense of the Libyan people, and he moved to nationalize oil assets, claiming that the revenues would be shared among the population.
  • In the early years of his rule, al-Qadhafi published a multivolume treatise, the Green Book, in which he expounded his political philosophy and ideology—a fusion of Arab nationalism, socialism, and Islam.
  • Although he has been Libya’s undisputed leader since 1969, making him one of the world’s longest-serving rulers, he holds no official title and is referred to as Brother Leader or the Guide of the Revolution.
  • Al-Qadhafi adopted decidedly anti-Western policies, and after his regime was implicated in several international terrorist attacks, the United States imposed sanctions on Libya in 1981.
  • In 1988, a U.S. airliner exploded over Lockerbie, Scotland, killing all 259 people aboard as well as 11 residents of the town.
  • After an exhaustive investigation, Scottish police issued arrest warrants for two Libyans, including an intelligence agent.
  • The UN Security Council imposed trade sanctions on the country. Over the next several years, Libya became more economically and diplomatically isolated.
  • In 1999, al-Qadhafi moved to mend his international image and surrendered the two Lockerbie bombing suspects for trial. He accepted responsibility for past acts of terrorism and offered compensation packages to the families of victims.
  • The United Nations suspended its sanctions, and the European Union (EU) reestablished diplomatic and trade relations with Tripoli.
  • The regime also improved its relations with the United States. In 2004, a year after al-Qadhafi’s government announced that it had scrapped its nonconventional weapons program, the United States established a liaison office in Tripoli.
  • The U.S. government eventually removed Libya from its list of state sponsors of terrorism, reestablishing a full embassy in Tripoli in 2006.
  • In 2009, Libya offered a jubilant welcome for the convicted Lockerbie bomber, who was released by Scottish authorities due to a [supposed] terminal illness.

Additonal points:

  • Libya is not an electoral democracy.
  • Political parties have been illegal for over 35 years, and the government strictly monitors political activity.
  • Organizing or joining anything akin to a political party is punishable by long prison terms and even the death sentence.
  • There is no independent press.
  • The government controls the country’s only internet service provider. Internet usage stood at only 4.7 percent in 2008 due to poor telecommunications infrastructure.
  • Nearly all Libyans are Muslim. The government closely monitors mosques for Islamist activity, and there have been unconfirmed reports of Islamist militant groups allied to Al-Qaeda operating against the government.
  • The government does not uphold freedom of assembly. Those demonstrations that are allowed to take place are typically meant to support the aims of the regime.
  • The People’s Court, infamous for punishing political dissidents, was abolished in 2005, but the judicial authority has since created the State Security Court, which carries out a similar function.

From freedomhouse.org/template.cfm?page=22&year=2010&country=7862

Resources

For a map of Libya, go to worldatlas.com.

Watch a news report from August 23rd, right before the rebels took over control of Gadhafi’s government compound:

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