Soldiers of Lybian leader Libyan fighters are poised for assaults on two of Muammar Gaddafi's last remaining strongholds, Bani Walid and Sirte, but renewed negotiations have raised hopes for a peaceful end to the standoff.  Rebels pushed to within 7km of the centre of Bani Walid. They exchanged fire with some of Gaddafi's forces. But they have since retreated a little bit instead of setting up a defensive position there, Al Jazeera's Sue Turton reported. She added that "rebels said that another group had come forward from the centre of Bani Walid saying but that they are completely separate from the others that wanted to talk yesterday when it all broke down." According to her, rebels yet again have said they will stall going any further, they have pulled back from that 7km mark, they are static there now and they are waiting yet again to see if they can come to any agreement. However, they are very concerned that there could very well be civilians who are killed, so they are willing to talk to just about anybody that puts their hands up and says they represent anything to do with the pro-Gaddafi forces, Turton reported.
As talks on the handover of the Gaddafi stronghold of Bani Walid to National Transitional Council control failed on Sunday, anti-Gaddafi forces said it was only a matter of time before they moved on the town. Libyan forces failed to convince Muammar Gaddafi loyalists on Sunday to give up one of their last strongholds without a fight, raising the prospect of an assault on the town of Bani Walid. A son of Muammar Gaddafi blamed his high-profile brother for the collapse of talks with Libya's new rulers on abandoning one of the last remaining loyalist bastions, CNN television reported late Sunday.
Saadi Kadhafi told CNN in a telephone interview that an "aggressive" speech broadcast by his brother, Saif Al Islam Gaddafi, a few days ago had led to the breakdown in negotiations, paving the way for an attack.
Outside the desert town, a National Transitional Council (NTC) negotiator said talks were over.
“As chief negotiator, I have nothing to offer right now. From my side, negotiations are finished,” Abdallah Kanshil, a negotiator for the interim council said at a checkpoint some 60 km (38 miles) outside Bani Walid.
“We will leave this for the field commanders to decide, for the NTC to decide what to do next. I urge Gaddafi people to leave the town alone.”
He said all NTC proposals put forward on Sunday were rejected. “They said they don’t want to talk, they are threatening everyone who moves. They are putting snipers on high rise builtings and inside olive groves, they have a big fire force. We compromised a lot at the last minute,” he said. Earlier on Sunday NTC negotiator Abdul Azil said NATO-backed NTC forces were just 10 km from Bani Walid and inching forward, ready to attack what he said were an estimated 100 pro-Gaddafi fighters there if necessary.
“We are waiting for the order for our commanders to go into the city. We have told them we are coming. Everyone should stay at home. Hopefully it will be done without bloodshed,” he said, as warplanes of the Western alliance roared overhead.
In Tripoli, life was returning to normal after last month’s fighting and last week’s Muslim holiday. Traffic was heavy as fuel supplies improved. Cafes were busy and offices opened.
NTC officials announced plans to bring their heavily-armed fighters under control and try to integrate thousands of them into the police force and find jobs for others.
“We only need the revolutionaries for the first month. We have a plan we will announce today to include 3,000 of the revolutionaries in the interior ministry who will be trained and will work in national security,” interim Interior Minister Ahmad Darat told reporters.
“The rest of them work in business or are builders etc—they don’t want to be in the police. They will give up their weapons. It’s just a matter of time and organisation.”
Officials said there would also be retraining and reintegration schemes for those who fought for Gaddafi. The disintegration of Gaddafi’s rule after a six-month war has left a security vacuum in Libya, with no state security forces, rebel fighters who are not part of any formal structure and huge quantities of unsecured weapons. The proliferation of weapons in Libya is a serious issue and the new rulers need to establish a proper police force and army to replace the hundreds of armed groups who patrol the streets, the United Nations Secretary-General’s special adviser on Libya said.
“Proliferation of weapons is a major concern,” the adviser, Ian Martin, said on a visit to Tripoli.
“It’s a matter of moving from the current situation in which there are many people with weapons who are fighting in this conflict to one where there is a single public security force and the kind of proper state army that didn’t exist in Libya in the past,” he told Reuters in an interview.
A rebel spokesman had also said that talks with Qaddafi’s spokesman, Moussa Ibrahim, over the surrender of the regime had also broken down.
Ibrahim rebuffed suggestions that Bani Walid was about to surrender and insisted that tribal leaders there were still loyal to the fallen leader.
“Bani Walid is a major city hosting one of the biggest tribes in Libya who have declared their allegiance to the leader and they refused all approaches for negotiation with the Transitional Council,” Ibrahim told Reuters in a telephone interview.
He added that Qaddafi is “in a safe place surrounded by many people who are prepared to protect him.” There has been speculation from NTC officials Qaddafi himself, and not just his sons, may be hiding in the town. But as the situation intensifies, a United Nations envoy visiting Tripoli voiced concerns over security in Libya on Sunday. Ian Martin, visiting Libya to compile a report for UN Secretary General Ban Ki-moon on rebuilding the country after its civil war, said his main concern was the proliferation of weapons in Libya since the unrest began in mid-February and advised that the new rulers need to establish a proper police force and army to replace the hundreds of armed groups who patrol the streets.
“It’s a concern to Libya’s neighbors, quite naturally. The European Union was working on border security issues here in the past and I think it has made clear that it’s willing to assist Libya in future if asked to do so.”
In other news, Chinese arms firms held talks with representatives of  Muammar Gaddafi's beleaguered forces in July over weapons sales, but behind Beijing's back, the Chinese Foreign Ministry said on Monday. The ministry confirmed the gist of reports in the Globe and Mail and the New York Times that documents found in the Libyan capital, Tripoli, indicated that Chinese companies offered to sell rocket launchers, anti-tank missiles and other arms with a total of some $200m to Gaddafi's forces, despite a UN ban on such sales. A ministry spokeswoman, Jiang Yu, said members of Gaddafi's government had come to China and held talks with a "handful" of Chinese arms company officials without the knowledge of the government. Willem van Kemenade, a China analyst, spoke to Al Jazeera about China's announcement that arms companies had made arrangements with Gaddafi's regime behind the government's back:
"The Chinese denial has plausibility in the sense that the Chinese government particularly the Foreign Ministry has no control over a lot of the large influential state companies, including arms dealers.
"Secondly, that China has seriously comtemplated supplying arms at that late stage in the Libyan conflict, I find very doubtful because the Chinese have been making overtures to the rebels from June. But there has been a lot of posturing of course. Some of these rebel leaders have been issuing warnings that countries like Russia and China who have not been supporting the coalition from the very beginning, might be penalised by exclusion from the reconstruction programme. And it's quite conceivable that China is playing its own games and the rebel counsel has indeed toyed with those ideas.
"But it is inconceivable that China will be excluded from the reconstruction because it is one of the top players in the world in the construction industry, in infrastructure, in supply of labour for large projects, etc. Moreover it's one of the top five in the UN security counsel."
China offered huge stockpiles of weapons to Muammar Qaddafi during the final months of his regime and held secret talks on shipping them through Algeria and South Africa, The Globe and Mail reported. State-controlled Chinese arms companies were ready to sell weapons and ammunition worth at least $200 million (€141 million) to Qaddafi in late July, despite UN sanctions, the Canadian daily said, citing secret documents it had obtained. The papers do not confirm whether any military assistance was delivered, but senior members of Tripoli’s new ruling council say they reinforce their suspicions about the recent actions of China, Algeria and South Africa, the report said on Sunday. Algeria, China and South Africa have been reluctant to endorse NATO’s actions in Libya, the Toronto newspaper recalled.
Omar Hariri, chief of Libya’s rebel National Transitional Council’s (NTC) military committee, reviewed the documents and concluded they explained the presence of new weapons on the battlefield, The Globe and Mail said.
“I’m almost certain that these guns arrived and were used against our people,” Hariri said.
The documents were discovered in a pile of trash sitting at the curb in a neighborhood known as Bab Akkarah, where several of Colonel Qaddafi’s most loyal supporters had homes.
They showed that Qaddafi’s top security aides made a trip to Beijing in mid-July, where they met with officials from China North Industries Corp. (Norinco); the China National Precision Machinery Import & Export Corp. (CPMIC); and China XinXing Import & Export Corp. The Chinese companies offered the entire contents of their stockpiles for sale, and promised to manufacture more supplies if necessary, The Globe and Mail said. The hosts thanked the Libyans for their discretion, emphasized the need for confidentiality, and recommended delivery via third parties, it added.
The Chinese companies also noted that many of the items the Libyan team requested were already held in the arsenals of the Algerian military and could be transported immediately across the border, The Globe and Mail said. Appendices stapled to the main memo show that the parties discussed truck-mounted rocket launchers, fuel-air explosive missiles and anti-tank missiles, among others items, the report said. The Chinese apparently also offered Qaddafi’s men the QW-18, a surface-to-air missile, which is roughly similar to a US Stinger and is capable of bringing down military aircraft, the paper said.
China has often said that it scrupulously abides by UN sanctions. Even if the arms were not delivered, or the cited documents turn out to have no foundation, the controversy could intensify mistrust between Beijing and the rebels seeking to defeat Qaddafi's shrinking forces and claim control of all Libya. On the weekend, the head of the NTC, Mustafa Abdel Jalil, said China had obstructed the release of more of Libya's frozen assets.
Although China agreed with other powers last week the unfreeze of $15 billion of Libyan assets abroad, it opposed handing control of more to the interim ruling council, according to rebel spokesman Shamsiddin Abdulmolah.
Libya's interim council has promised rewards for those who took a leading role in backing the revolt against Qaddafi, and that has raised concerns that China could be disadvantaged. China is the world's second-biggest oil consumer, and last year it obtained 3 percent of its imported crude from Libya. China did not use its UN Security Council veto power in March to block a resolution that authorized the NATO bombing campaign against Qaddafi's forces, but it condemned the expanding strikes and repeatedly urged compromise between his government and rebels. Beijing had since courted Libyan rebel leaders, and has urged a “stable transition of power”.
In related news, the United Nations is ready to assist Libya's new authorities in their preparations for elections, UN envoy Ian Martin told reporters in Tripoli on Monday. "The National Transitional Council has put assistance with the electoral process very high on the list of tasks where they seek United Nations assistance and so we have done a good deal of preparatory work," he said. The special adviser to UN Secretary General Ban Ki-moon arrived in Tripoli on Saturday for talks with the local authorities on how the UN  can help them in the months ahead. Martin said it was "too soon for details" on how the transition would unfold as decisions regarding the electoral system, the establishment of an electoral commission and other technical details have yet to be determined. "The United Nations is certainly ready to move very fast in bringing the electoral expertise that can assist the authorities on moving on the timetable (for elections) that they have established." On Friday, Libya's new leaders said they will move to Tripoli next week after their forces defeated Moamer Kadhafi and pledged to restore order and stage elections in 20 months. A body tasked with drafting a constitution should be elected within eight months and a government within 20 months, NTC representative in Britain Guma al-Gamaty told the BBC on Friday. For the first eight months the NTC would lead Libya, during which a council of about 200 people should have been directly elected, Gamaty said, referring to plans drawn up in March and refined last month. "This council... will take over and oversee the drafting of a democratic constitution, that should be debated and then brought to a referendum," he said.
Within a year of the council being installed, final parliamentary and presidential elections should be held. The new leadership was also boosted on the economic front, with the weekly Middle East Economic Survey reporting Libya could at least partially resume crude oil output and refining within days.