The United States aims to release billions of dollars in frozen Libya-owned assets to help rebels fast running out of cash, Secretary of State Hillary Clinton told the anti-Gaddafi 'contact group' in Rome on Thursday.

Washington has frozen some $30 billion in assets owned by Muammar Gaddafi's government but there are legal obstacles to accessing them. Nor can the rebels, based mainly in eastern Libya, sell oil abroad due to United Nations sanctions.

Clinton said Washington would try to pass legislation to allow the funds to be channelled to the Libyan people.
   
The rebel Transitional National Council (TNC), based in the eastern city of Benghazi, says it needs about $2-3 billion in immediate aid. A spokesman said the rebels only had funds to pay for basic needs until the end of May.
   
'I will be formally announcing our non-lethal assistance so I think that there is an effort with urgency to meet the requests that the TNC is making,' Clinton said.

Thursday's meeting of the Nato-backed coalition against Gaddafi comes after the two-month conflict descended into stalemate, with the rebels unable to defeat Gaddafi's forces, despite Nato air strikes.

The contact group meeting agreed to create an instrument, dubbed the Temporary Financial Mechanism, to get money to the rebels, but there has been a cautious response from Western governments already grappling with their own financial problems.

'As far as the UK's position is, we've got no plans to contribute to any particular fund because we think we've made a very substantial contribution to humanitarian assistance,' said a spokeswoman for British Prime Minister David Cameron.

Clinton and Italian Foreign Minister Franco Frattini both welcomed the decision to create the temporary mechanism and Frattini thanked Qatar, the leading Arab supporter of the Libyan uprising, for its efforts to create the fund.

The meeting is not expected to address military issues but ministers are likely to re-state their confidence in Nato operations, despite the lack of progress since initial airstrikes drove them back from Benghazi in March.

'Our action to protect civilians is indispensable to open the political phase,' Frattini said. 'The faster this happens, the faster the political solution can begin.' - Reuters