AP – Human Rights council members follow a speech by U.S. Secretary of State Hillary Rodham Clinton at the … 
WASHINGTON – The United States and European allies intensified efforts to isolate Libyan leader Moammar Gadhafi on Monday, redoubling demands for him to step down, questioning his mental state and warning that those who stay loyal to him risk losing their wealth and being prosecuted for human rights abuses.
Europe, which buys most of Libya's oil exports, outlined fresh sanctions to force the dictator to stop attacks on civilians and step down after 42 years of iron-fisted rule. The European Union issued travel bans and an asset freeze against senior Libyan officials, and ordered an arms embargo on the country.
Germany proposed a 60-day economic embargo to prevent Gadhafi from using oil and other revenues to repress his people.
The EU has much more leverage over Libya than the United States since Europe buys 85 percent of Libyan oil exports and Gadhafi and his family are thought to have significant assets in Britain, Switzerland and Italy. Switzerland and Britain already have frozen Libyan assets.
The travel and financial sanctions are aimed at peeling away loyalists from Gadhafi in the hope of further isolating him.
"These sanctions and accountability mechanisms should make all members of the Libyan regime think about the choice they have before them: violate human rights and be held accountable or stop the violence and respect the Libyan people's call for change," U.S. Ambassador to the United Nations Susan Rice told reporters following crisis meetings on Libya at the White House. "There's no escaping that critical choice."
As the Pentagon moved naval and air forces closer to Libya amid active international discussions about imposing a no-fly zone over the country, the U.S. Treasury Department announced it had frozen at least $30 billion in Libyan assets since President Barack Obama imposed financial and travel sanctions on Gadhafi, his family, senior Libyan officials and the government last week. That figure is the largest amount of money ever frozen by a U.S. sanctions order, which also set out travel bans for the Libyan leadership.
Administration officials said that as long as the government continues its violent crackdown against opponents who now control most of eastern Libya, all options, including military ones, remain on the table. Speaking in Geneva to the U.N. Human Rights Council, Secretary of State Hillary Rodham Clinton said the United States and European nations were exploring the idea of restricting airspace to prevent Gadhafi's government from bombing its citizens.
"Gadhafi has lost the legitimacy to govern, and it is time for him to go without further violence or delay," she said. "No option is off the table. That of course includes a no-fly zone."
At the Pentagon, officials said they were moving forces in the region in case they were needed but did not say what they might be used for.
"We have planners working various contingency plans and ... as part of that we are repositioning forces in the region to be able to provide options and flexibility," said Marine Col. Dave Lapan, a Defense Department spokesman.
The U.S. has a regular military presence in the Mediterranean Sea, two aircraft carriers in the Persian Gulf area and a wide range of surveillance equipment available for use in the region. Without specific information about what assets were being moved and where, it was impossible to tell whether the U.S. moves were intended as a military threat or were simply a symbolic show of force.
A flight ban seemed unlikely in the short term. Senior U.S. officials said the issue was not discussed during Clinton's meeting with Russian Foreign Minister Sergey Lavrov, whose country would have to support such a move if the U.S. and its allies wanted authorization from the U.N. Security Council. Lavrov dismissed the idea in public remarks.
Even before the EU announced the new sanctions, France pledged to send two planes with humanitarian aid to Libya's opposition stronghold of Benghazi after days of increasing concern about the hundreds, and potentially thousands, of deaths.
After meetings with other nations' foreign policy chiefs in Geneva, Clinton said the U.S. was sending two aid teams to help Libyan refugees. One would go to Egypt and the other to Tunisia to deal with the influx of fleeing Libyans. The U.S. has pledged an initial $10 million to help refugees.
Gadhafi, meanwhile, in an interview with ABC News, dismissed the idea of leaving, rejected the allegations that he had ordered a crackdown on opponents and repeated his belief that the Libyan people love him, a claim that was met by derision in Washington.
"It sounds, just frankly, delusional," Rice said. She said Gadhafi's behavior, including laughing on camera in television interviews amid the chaos, "underscores how unfit he is to lead and how disconnected he is from reality."
"He should get out of his tent and see what's really happening in his country," said State Department spokesman P.J. Crowley, with a derisive nod to Gadhafi's favored living quarters.
Crowley said the U.S. ambassador to Libya, Gene Cretz, who has been in Washington since early January for consultations, had been speaking to a broad range of Libyan opposition figures but declined to identify which ones.
He also said the Libyan government had notified the administration that it had fired its ambassador to the United States, Ali Aujali, who last week joined the opposition, and had replaced him with a Gadhafi loyalist.
The U.S. closed its embassy in Tripoli on Friday after the remaining diplomats were evacuated but has not broken diplomatic relations with Libya. Last Monday, Aujali joined other Libyan diplomats in calling for Gadhafi to step down although he said he would not resign his post as ambassador.
Amid the flurry of international activity, Obama kept up his telephone diplomacy and discussed Libya with Canadian Prime Minister Stephen Harper. Obama expressed his appreciation for Canada's decision to impose its own set of sanctions against the Gadhafi regime, the White House said.
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Associated Press writers Pauline Jelinek in Washington, John Heilprin and Frank Jordans in Geneva, Sylvie Corbet and Angela Charlton in Paris, Raf Casert and Slobodan Lekic in Brussels, Danica Kirka and Raphael G. Satter in London, Geir Moulson in Berlin and Suzan Fraser in Ankara contributed to this report.
http://news.yahoo.com/s/ap/20110301/ap_on_re_us/libya_diplomacy
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