Delegates from nearly 40 countries seeking an end to the Libyan conflict met in Istanbul today to discuss more financial aid and diplomatic support to the country's main opposition group as the rebels struggle to defeat Col Muammar Gaddafi's forces.

Senior US officials have said the Obama administration is preparing to strengthen ties with the Transitional National Council once it presents detailed plans for a democratic, transparent and inclusive government, as it becomes increasingly clear that the council will govern a post-Gaddafi Libya.

The council is expected to lay out plans for moving forward during the meeting of the Contact Group on Libya and seek more financial aid as well as diplomatic recognition.

However, there was uncertainty whether the presentation would satisfy concerns that the initial post-Gaddafi regime represents the full spectrum of Libyan society - all regions, all tribes and all political parties.

US Secretary of State Hillary Clinton and Nato Secretary General Anders Fogh Rasmussen are attending the meeting.

Rebel forces are trying to close in on the Libyan capital to overthrow the Libyan leader. But his forces reportedly repelled a coordinated attack by Nato forces and rebels against a strategic oil town, Brega, in the east of the country yesterday.

Government spokesman Moussa Ibrahim told journalists that rebel forces attacked Brega backed by Nato forces in the sea and air in an attack that he said violated the alliance's UN mandate to protect civilians.

"It was a full scale attack and it was heavy and merciless," he said. "We were successful in combating this attack and we did defeat both Nato and the rebels and we killed many rebel forces and captured a good number of them as well. It proves Nato is not interested in democracy, protecting civilians or peace." a

Mr Ibrahim's assessment of the fighting could not immediately be verified.

Nato is enforcing a no-fly zone over Libya and hitting government targets as part of a UN mandate to protect civilians. It is not, however, supposed to be the military arm of rebel ground forces, which have been trying to retake Brega for months.

The civil war in Libya appears to have hit a stalemate, despite a protracted Nato bombing campaign against Gaddafi's forces. Rebels control eastern Libya and pockets in the west, while Gaddafi is holding on to Tripoli and large stretches of western Libya.

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