By Aziz El Yaakoubi
SKHIRAT, Morocco (Reuters) - Libya's warring factions met in Morocco on Thursday to sign a U.N.-brokered peace deal to form a national government that Western powers hope will bring stability and help fight a growing Islamic State presence.
Four years after Muammar Gaddafi's fall, Libya has steadily splintered into rival fiefdoms with two rival governments -- a self-declared one in Tripoli and an internationally recognized one in the east -- each backed by coalitions of former rebels and militias.
After more than a year of wrangling between the two factions, the United Nations has proposed a unity government deal and a ceasefire that will open the way for international aid and training to rebuild the OPEC oil-producing state.
But the U.N. accord faces resistance from hardliners in both camps. Some opponents criticize the deal as imposed and want a Libyan initiative; others reject names proposed for the presidential council that will form the new government.
Critics also question how armed factions on the ground will react and how any new government will be installed and secured in Tripoli.
"It is in the nature of this agreement that nobody is entirely happy. This is always like this in difficult situations," U.N. envoy Martin Kobler told reporters after a briefing in the east. "We have only 75 percent of people who are happy with it. But I think it's a good start."
The official signing was scheduled for later on Thursday.
Representatives from both parliaments, local councils and political parties were in the Moroccan coastal town of Skhirat to sign the deal. But exact numbers from each parliament who would sign were not immediately clear.
Western officials believe war fatigue, promises of foreign aid, the strain on Libya's oil economy and the common threat of Islamic State will help build momentum for the national government and bring onboard opponents.
"We have reached an agreement, but the biggest challenge now is to implement it," said Salah Huma, a parliament member and negotiator for the eastern government.
The chiefs of each rival parliament have rejected the U.N. deal and called for more time to negotiate a Libyan initiative though diplomats say both men may face international sanctions for blocking a vote on the U.N. agreement.
Since revolution ousted Gaddafi, Libya has struggled with almost constant instability as heavily armed brigades of former rebels and their political allies squabbled for control.
Battered by protests and attacks, oil production that accounts for most government revenue is now less than half of the 1.6 million barrels per day level prior to 2011.
But last year, fighting intensified when one armed faction took over Tripoli, set up its own government and reinstated the old parliament, the General National Congress. Since then, the recognized government and elected House of Representatives operate out of the east of the country.
In the chaos, Islamic State militants have steadily expanded their presence, taking over the city of Sirte, attacking a hotel and a prison in Tripoli, ransacking oilfields to the south of Sirte and executing a group of Egyptian Christians.
(Additional reporting by Ayman Al-Warfalli in Benghazi; writing by Patrick Markey; Editing by Dominic Evans)
