By Silvia Aloisi and John Irish
ROME (Reuters) - Western and Arab countries opposed to Muammar Gaddafi pledged to unlock hundreds of millions of dollars to help Libya's rebels on Thursday as they tried to step up the pressure to drive him from power.
NATO planes have bombed Gaddafi's forces since March but the ill-equipped and disorganised rebels have struggled to exploit this and break out of their stronghold in eastern Libya.
Ministers from an anti-Gaddafi coalition called the Libya contact group, including the United States, France, Britain and Italy, as well as Qatar, Kuwait and Jordan, agreed in Rome to set up a fund to help the rebels, who are desperately short of cash.
The rebel Transitional National Council, based in the eastern city of Benghazi, says it needs $2 billion (1.2 billion pounds) to $3 billion in immediate aid. A spokesman said the rebels only had funds to pay for basic needs until the end of May.
Qatari Prime Minister Hammad bin Jassim al-Thani said his country pledged $400 million to $500 million to a so-called Temporary Financial Mechanism. Kuwait promised $180 million.
However, others were more cautious about putting a figure on how much they might provide and Britain said it had already contributed enough.
"The temporary financial mechanism is well defined now and will be operation in the next few weeks," French Foreign Minister Alain Juppe told reporters. He said Paris was still evaluating its contribution.
U.S. Secretary of State Hillary Clinton said Washington would try to pass legislation to unblock billions of dollars in Libyan assets for the rebels.
Washington has frozen about $30 billion in assets owned by Muammar Gaddafi's government but there are legal obstacles to accessing them. Because of U.N. sanctions, the rebels are unable to sell oil abroad.
"It's a good start," said Mahmoud Jabril, head of the rebels' interim government.
The Rome meeting discussed ways to stop Gaddafi from exporting crude oil or importing refined petroleum as the coalition searched for ways to isolate the Tripoli government from world markets.
"The regime must not be allowed any access to oil and gas revenues to support actions against the Libyan people," a final statement said.
INCREASE PRESSURE
In its concluding statement, the contact group said time was running out for Gaddafi's government and it was increasingly isolated diplomatically. It called on the international community not to receive his envoys.
There was little optimism for any quick settlement of the conflict, almost two months after French warplanes carried out the first air strikes.
"These things clearly take time but the resolve is there and the resolve was very clearly there in the meeting today," said British Foreign Secretary William Hague, who called for military action to be stepped up.
However, he ruled out arming the rebels directly and NATO Secretary-General Anders Fogh Rasmussen said that there was no question of sending in ground troops.
"NATO has no intention of putting boots on the ground. It is for the opposition to do the fighting on the ground," he said.
Italian Foreign Minister Franco Frattini denied the situation in Libya had stalled, but with no military breakthrough in sight, attention has switched to seeking ways of cutting Gaddafi's financial lifelines.
The coalition promised to cut off arms imports and mercenaries to the government side and block Libyan satellite television.
(Additional reporting by Arshad Mohammed and Adrian Croft in London)
(Writing by James Mackenzie; Editing by Barry Moody and Andrew Dobbie)
