20110905 Reuters NORTH OF BANI WALID, Libya (Reuters) - Libyan forces on Monday awaited orders to storm a desert town held by fighters loyal to Muammar Gaddafi after negotiations failed to dislodge them from one of the deposed leader's remaining bastions.
Military units under Libya's interim council are trying to winkle pro-Gaddafi forces out of Bani Walid, 150 km (95 miles) southeast of Tripoli, as well as the coastal city of Sirte and a swathe of territory stretching far into the desert interior.
"The door is still open for negotiations. Our offer still stands," said Mohammed al-Fassi, a field commander for the National Transitional Council (NTC), outside the town.
"The offer is that people who committed crimes in Gaddafi's name will be put under house arrest until the new government is formed. Some of them have accepted this but others said no."
Asked whether the NTC was considering taking Bani Walid by force, Fassi said: "There is no other option".
A flurry of weekend talks with Bani Walid tribal elders failed to make headway and that effort appears to be over.
"As chief negotiator, I have nothing to offer right now. From my side, negotiations are finished," Abdallah Kanshil said at a checkpoint some 60 km outside Bani Walid.
"They said they don't want to talk, they are threatening everyone who moves. They are putting snipers on high-rise buildings and inside olive groves, they have a big fire force. We compromised a lot at the last minute," he said.
It would be up to the NTC to decide what to do next, he added. "I urge Gaddafi's people to leave the town alone."
NTC officials have suggested that sons of Gaddafi or even the former leader himself may be hiding in Bani Walid, which like other besieged towns is cut off from normal communications.
The region around Bani Walid is traditionally pro-Gaddafi. In the nearby town of Tarhouna, Gaddafi-era green flags were still flying not far from the NTC's red, green and black flags.
NTC forces have also closed in on Gaddafi's birthplace in Sirte, which lies across Libya's main east-west coastal highway.
Ahmed Bani, an NTC military spokesman in the eastern city of Benghazi, said negotiations were continuing with elders and tribes, but added: "The time is coming when talk is done with and we will enforce our will upon liberating the city of Sirte."
HUMANITARIAN CONCERNS
A United Nations official said on Sunday he was worried about humanitarian problems in besieged Gaddafi-held areas.
"We are looking very closely at the situation in Sirte," said Panos Moumtzis, U.N. humanitarian coordinator for Libya.
"We are preoccupied about the protection of civilians in this area. We understand there is a dialogue taking place. We would really like to see a peaceful solution as fast as possible."
In Tripoli, life was returning to normal after NATO-backed rebels drove Gaddafi out on August 23 after a six-month civil war.
The NTC, trying to bring those heavily-armed fighters under control, has announced plans to integrate 3,000 of them into the police force and find jobs for others. Officials also promised schemes to retrain and reintegrate those who fought for Gaddafi.
The disintegration of Gaddafi's rule war has left a security vacuum in Libya, with many former rebel fighters outside any formal structure, and huge quantities of unsecured weapons.
The NTC is trying to assert its authority, but in a sign of dissent, Ismail al-Salabi, an Islamist military commander who fought Gaddafi's forces, urged interim cabinet members to resign because they were "remnants of the old regime".
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