Libyan Rebels Win Backing of U.S., EU as Qaddafi Says `My People Love Me'

The U.S. and European nations solidified their support for Libya’s opposition, promising humanitarian aid and planning for a no-fly zone, as leader Muammar Qaddafi declared that “my people love me” and suggested that the U.S. wants to occupy his country.

The European Union today imposed an arms embargo and other sanctions, and the U.S. said it has frozen $30 billion in Libyan assets. The U.S. said refugee-aid teams were sent to Libya’s borders while U.S. American naval and air units were being repositioned in the Mediterranean.

U.S. Secretary of State Hillary Clinton met with ministers from the E.U. and Russia in Geneva. The actions by the U.S. and Europe, a major consumer of Libyan oil, were designed to pressure Qaddafi to quit. He has “lost the legitimacy to govern and it is time for him to go without further violence or delay,” Clinton said.

Middle East shares tumbled, sending Dubai’s stock index to the lowest level in almost seven years, as political unrest in the region spread to the Sultanate of Oman and reignited in Tunisia, prompting investors to trim riskier assets.

The United Nations estimates that more than 1,000 people have died in the uprising and almost 100,000 have fled amid the heaviest fighting in six weeks of unrest that swept parts of North Africa and the Persian Gulf, home of the world’s biggest oil reserves.

After the meetings in Geneva, Clinton said the U.S. is allocating $10 million for refugee assistance and immediately sending aid teams to the Tunisian and Egyptian borders with Libya.

No-Fly Zone

Aid personnel at the borders will also be in position to get information about what assistance is needed by the opposition movement inside Libya, a State Department official said under rules that don’t allow the use of names. The imposition of a no-fly zone, intended to keep Qaddafi’s force from conducting air strikes or flying in mercenaries, were part of the contingency discussions among the ministers, the official said.

Clinton told reporters that the movement of U.S. military forces was to position them to help with humanitarian efforts and, aside from discussion of a no-fly zone, the the U.S. is not preparing for military intervention. “There is not any pending military action involving U.S. naval vessels,” she said.

Qaddafi Laughs

Qaddafi, in an interview with ABC News, laughed at a suggestion he quit and denied using force against his people, ABC said in a news release. He said the rebels in control of Benghazi are terrorists loyal to al Qaeda and he was “surprised” that the U.S. isn’t supporting him. “Now that we are fighting terrorists, they have abandoned us,” he said, according to ABC.

In the latest clashes, three soldiers from a force loyal to Qaddafi were killed in clashes with protesters in Zawiyah, Al Arabiya reported, citing rebels in the town. It said that Qaddafi’s troops were trying take control of the town, 45 kilometers (28 miles) west of Tripoli and the nearest population center to fall to the rebels. An Associated Press reporter saw a large pro-Qaddafi force massed on the western edge of town with about a dozen armored vehicles and tanks and jeeps mounted with anti-aircraft guns.

Rebels Organize

Libyan rebels are organizing in the eastern port of Benghazi, the biggest city they control. On the roads between Benghazi and the Egyptian border, anti-Qaddafi protesters carrying assault rifles and former soldiers in uniform set up tents and searched passing cars for weapons, some of them welcoming passersby with juice and sweets.

Oil fell the most in two weeks as Saudi Arabia offered to make up for supplies lost because of unrest in Libya and on reports the North African country is exporting crude.

Crude oil for April delivery declined 91 cents to settle at $96.97 a barrel on the New York Mercantile Exchange, the biggest daily drop since Feb. 11. Futures reached $103.41 a barrel on Feb. 24, the highest intraday price since Sept. 29, 2008. They have advanced 22 percent in the past year.

The regional unrest that ousted Tunisian President Zine El Abidine Ben Ali and Egyptian President Hosni Mubarak reached Oman, where two demonstrators were killed yesterday and several were wounded in clashes with security forces in the city of Sohar, according to hospital and government officials.

Demonstrations in Sohar resumed today, and a hypermarket in the coastal city was set on fire as hundreds gathered to protest and roads were closed. Sultan Qaboos Bin Said, the ruler since 1970, has told the government to create 50,000 jobs and boost allowances for those without full-time work.

Oman Impact

Oman, where companies including Royal Dutch Shell Plc and Total SA have a stake in the oil industry, produces about 800,000 barrels a day and lies at the entrance to the Strait of Hormuz, through which a fifth of the world’s oil passes.

Oman’s benchmark MSM30 stock index slumped 4.9 percent, the biggest drop for more than two years. In Dubai the main index fell 3.8 percent to a seven-year low. The Bloomberg GCC 200 index of regional shares fell 1 percent.

In Tunisia, where the regional turmoil began two months ago, protests have flared up again, forcing interim Prime Minister Mohamed Ghannouchi to resign after at least three people were killed. The demonstrators had called for the removal of Ghannouchi because of his links with former ruler Ben Ali, who fled the country on Jan. 14. Interim President Fouad Mebazaa named former foreign minister Beji Caid Essebsi as the new prime minister and appealed for calm.

Saudi Actions

In Saudi Arabia, the world’s largest oil supplier, activists and academics yesterday called on King Abdullah to increase political rights and move toward a constitutional monarchy. Libya and Saudi Arabia are among the 12 members of the Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s oil.

Yemeni opposition movements, which have been holding daily protests demanding the ouster of President Ali Abdullah Saleh after more than three decades, today refused an offer by Saleh to form a national unity government, al-Jazeera television said. Thirteen lawmakers quit Yemen’s parliament today to protest violence against demonstrators, as the government said three security officers have been killed in recent days.

Egypt stock trading is set to resume tomorrow after a suspension of more than a month amid a popular revolution that toppled the 30-year-old regime of former President Hosni Mubarak. The measure lost 16 percent the week ended Jan. 27, when it last traded. The Tunisian bourse suspended trading from today until further notice, the bourse said on its website.

International Sanctions

The UN Security Council voted 15-0 on Feb. 26 to freeze the foreign assets of Qaddafi and four aides and to bar them from traveling. The resolution also imposes an arms embargo on Libya and calls for an immediate end to violence that it says “may amount to crimes against humanity.”

Qaddafi’s family has no bank accounts abroad, Libya’s state television reported today, citing the leader’s son Saif al-Islam Qaddafi.

Austria has frozen assets valued at more than 1 billion euros (1.4 billion dollars) belonging to the Qaddafi family, Austrian state television ORF reported, citing the alpine country’s central bank governor Ewald Nowotny.

The U.S. Treasury today announced it had frozen $30 billion in cash and securities of Muammar Qaddafi and the Libyan government in what amounts to the largest ever U.S. blockage of assets, said David Cohen, acting Treasury undersecretary for terrorism and financial intelligence. He gave no details on the types of assets or the number of banks involved.

Governments throughout the world have rushed to get their nationals out of Libya. China has evacuated about 29,000 people, state news agency Xinhua said today, and Turkey said 18,000 of its citizens have been removed. The U.K. and Germany sent military missions to help with the evacuation.

To contact the reporters on this story: Viola Gienger in Washington at vgienger@bloomberg.net; Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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