Stalemate in Libya is giving way to building rebel pressure against the regime of Moammar Gadhafi, according to new U.S. intelligence reports.
While the battle is far from won, the officials point to three key indicators: dwindling fuel supplies, a cash crisis and reports of low morale among regime troops, U.S. officials told The Associated Press.
A Libyan official also said the country was facing a food shortage as the lack of fuel meant only 20 percent of crops have been harvested.
The U.S. assessment comes as French authorities describe overtures from Libyan emissaries reportedly seeking sanctuary for the Libyan leader, who has survived sustained bombing by NATO war planes and U.S. armed drones since mid-March.
While the rebels face their own supply problems, they have captured towns from Nalut to Kikla in Libya's western Nafusa mountains and cut a key crude oil pipeline that feeds one of the regime's major refineries in the town of al-Zawiya, the U.S. officials told the AP.
Letters of credit
They cited U.S. intelligence estimates that fuel shortages could occur within as little as a month.
Gadhafi is also facing a cash crisis after Turkey cut off his access, on July 4, to hundreds of millions in Libyan funds held in a Turkish-Libyan bank, the U.S. officials said. They spoke on condition of anonymity to discuss matters of intelligence.
While the Libyan strongman could not access actual cash, he had been issuing letters of credit to pay his debtors, including fuel importers, the U.S. officials said.
France's foreign minister reported that Gadhafi was prepared to leave power, citing Libyan emissaries who have approached the French government.
It was not immediately clear how credible the offer was. Gadhafi has refused to leave or give up power since U.S. and NATO forces launched a bombing campaign in support of rebels who rose up against the regime's bloody crackdown against anti-government protests.Video: In Libya, rebels prepare for an assault on Tripoli (on this page)
Foreign Minister Alain Juppe said that while the contacts do not constitute formal negotiations, "we receive emissaries who are saying: 'Gadhafi is prepared to leave. Let's discuss it.'" He didn't identify the envoys.
The U.S. State Department said Washington, too, is getting visitors.
"We have a lot of folks claiming to be representatives of Gadhafi one way or the other reaching out to lots of other folks in the West," State Department spokeswoman Victoria Nuland said.
"But the messages are contradictory," she said, adding that there has yet to be a clear-cut message "that Gadhafi is prepared to understand that it's time for him to go."
French officials and their allies have insisted that Gadhafi's giving up power is key to ending the hostilities.
U.S. officials briefed on intelligence reports could not confirm that Gadhafi was considering departing, but they cited rising pressure against the regime.
The U.S. officials said morale among Gadhafi's soldiers was poor, according to troops who were captured or defected. Commanders aren't pleased with the quality of forces they have and are not making major gains on the battlefield, the officials said.Video: Gadhafi's new recruits: A regiment of women (on this page)
Gadhafi's agriculture minister Abdul Almajeed Elgowood said Tuesday that Libya could face a shortage of food because the lack of fuel has prevented it from bringing in most of this season's grain harvest.
"It is harvest time and we just harvested 20 percent (of the crop) because we do not have means of transport because of the fuel shortage," Elgowood told reporters.
"We used to import 1 million tonnes (1.1 million tons of grain) per year, but with the embargo and United Nations bureaucracy we are afraid that we could face a shortage," the minister said. He said the grain crop this season is estimated at 300,000 tonnes (330,000 tons).Slideshow: Conflict in Libya (on this page)
Food and fuel for civilian use are not among the items covered by United Nations and European Union sanctions on Libya. But the sanctions bar traders from dealing with many Libyan firms and individuals linked to Gadhafi, and this has disrupted supplies.
Elgowood also warned of a water shortage because the government lacked fuel and spare parts to run pumps which extract the water from underground aquifers.
"In three to four months, the situation will deteriorate if the United Nations and NATO continue to prevent us from getting our needs for our people," the minister said.
Libyan officials also warned that the rebel-controlled eastern half of the country could be cut off from water supplies without a truce to allow for maintenance work on a power plant pumping water up from the desert.
About 70 percent of the country relies on water drawn from underground aquifers deep in the southern desert, and the plant powering it in the east is falling apart, Elgowood said.
However, in the rebel-held city of Benghazi, the manager of the Great Man-made River project, Abdel Razek al-Zlitni, said there are no water supply problems in eastern Libya.
"The No. 1 zone, which supplies the eastern side of Libya with water, is fine and is working perfectly," he said of the reservoir there.
Al-Zlitni said, however, that there is no communication with the besieged area in western Libya so it is unclear if it is having water problems.
The U.S. officials said the rebels, meanwhile, were so busy trying to hold territory and survive that they have done little work governing the territory they hold.
On Wednesday, Human Rights Watch said rebel forces had looted shops, homes and medical facilities in some of the towns they seized in the country's western mountains.
In several conquered towns, the rebels also torched homes believed to belong to Gadhafi supporters, the New York-based group said.
Gadhafi's forces in the area have been accused of much worse, including indiscriminate shelling of civilian areas and laying land mines.
HRW called on rebel commanders to hold their forces responsible for damaging civilian property.
"Opposition forces have an obligation to protect civilians and their property in the areas they control so people feel they can return home safely and rebuild their lives," said Joe Stork, the group's deputy Middle East and North Africa director.
Rebel commanders could not be immediately reached for comment.
HRW quoted one commander as acknowledging that some abuses had taken place, but denying that such acts were policy.
"If we hadn't issued directives, people would have burned these towns down to the ground," the group quoted Col. El-Moktar Firnana as saying.
The Associated Press and Reuters contributed to this report.