Rebel leaders won recognition as the legitimate government of Libya from the US and other world powers today in a major boost to their faltering campaign to oust Muammar Gadafy.
Western government said they also planned to increase the military pressure on Col Gadafy's forces to press him to give up power after 41 years at the head of the North African state.
Recognition of the rebels, announced by Secretary of State Hillary Clinton at a meeting in Turkey of the international contact group on Libya, is an important diplomatic step which could unlock billions of dollars in frozen Libyan funds.
The decision comes as reports are circulating that Col Gadafy has sent out emissaries seeking a negotiated end to the conflict, although he himself has remained defiant in his public utterances.
The Istanbul conference attended by more than 30 countries and international bodies also agreed a road map whereby Col Gadafy should relinquish power and plans for Libya's transition to democracy under the rebel National Transitional Council (TNC).
"Until an interim authority is in place, the United States will recognise the TNC as the legitimate governing authority for Libya, and we will deal with it on that basis," Ms Clinton said.
The decision to recognise the rebels, who have been waging a five-month military campaign against Col Gadafy, meant the Libyan leader had no option but to stand down, Italian foreign Minister franco Frattini said.
The contact group statement added: "... the formation of an interim government should be quickly followed by the convening of a National Congress with representatives from all parts of Libya."
The UN secretary-general's special envoy to Libya, Abdul Elah al-Khatib, will be authorised to present terms for Col Gadafy to leave power, but the British foreign minister said military action against Col Gadafy would be stepped up at the same time.
The political package to be offered Col Gadafy will include a ceasefire to halt fighting in the five-month-old war.
A rebel spokesman said he did not expect a ceasefire until Col Gadafy had been defeated and rejected suggestions of a pause in the fighting during the Muslim holy month of Ramadan, which begins at the start of August.
British foreign secretary William Hague told Reuters that at the same time as al-Khatib pursues a political settlement, "the military pressure on the regime will continue to intensify."
The Libya contact group, established in London in March, is trying, at its fourth meeting, to find a political solution that would persuade Col Gadafy to quit.
China and Russia, which have taken a softer line towards Col Gadafy, were invited to the contact group meeting for the first time, but decided not to become involved.
Turkish foreign minister Ahmet Davutoglu said he hoped a political solution could emerge by the start of Ramadan. He backed a rebel proposal for the release of $3 billion of frozen Libyan assets to alleviate a "grave" humanitarian situation during Ramadan in areas of Libya controlled by the rebels and by Col Gadafy.
"We have agreed to lead a humanitarian aid campaign to transfer aid to all Libyan cities. We want the suffering of the Libyan people to end and to form the necessary humanitarian corridors," Mr Davutoglu said.
Reuters