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By Emmanuel Jarry and Nick Carey
BRUSSELS/TRIPOLI (Reuters) - France rejected on Friday U.S. criticism of Europe's performance in the NATO operation against Libyan leader Muammar Gaddafi while the U.S. administration survived Congressional anger in a funding vote.
Gaddafi has managed to stay in power despite months of NATO air operations to weaken his rule and help rebels based mainly in eastern Libya who have tried to advance on the west.
Reports of civilian deaths have exacerbated the public divisions between Western governments, as they ponder the future of a military commitment with no clear end in sight.
Several explosions shook the Libyan capital Tripoli on Friday night, a Reuters correspondent said. Jets could be heard overhead as Libyan tracer fire arced across the dark sky.
War-fatigued lawmakers in the U.S. House of Representatives took a symbolic swipe at President Barack Obama's military intervention in Libya but in a second vote rejected an effort to bar U.S. forces from continuing to carry out air strikes.
U.S. Secretary of State Hillary Clinton welcomed the vote. "We are gratified that the House has decisively rejected efforts to limit funding for the Libyan mission," she told reporters.
French President Nicolas Sarkozy assailed outgoing U.S. Defence Secretary Robert Gates for remarks earlier this month criticising EU nations for lacking military muscle.
"It was particularly inappropriate for Mr. Gates to say that, and what is more, completely false, given what is going in Libya," Sarkozy told reporters at an EU summit in Brussels.
"There are certainly other moments in history when he could have said that, but not when Europeans have courageously taken the Libyan issue in hand, and when France and Britain, with their allies, for the most part, are doing the work."
While the United States has stepped back from a leading role in the strike mission NATO took over on March 31, it has continued to provide essential assets, including reconnaissance planes, air-to-air refueling planes and armed drones.
In a June 10 valedictory speech, Gates said the Libyan campaign had exposed limitations, with an air operations centre designed to handle more than 300 sorties a day struggling to launch about 150.
"I think his retirement may have led him to not examine the situation in Libya very closely because, whatever people want to say, I don't have the impression that the Americans are doing the bulk of the work in Libya," Sarkozy said.
Gates is due to retire at the end of the month.
Discord among the Europeans over the NATO operation spilled into the public arena earlier this week when Italy called for a suspension of hostilities to allow humanitarian access and Britain, France and others loudly rejected the idea.
The Republican-led House, upset over Obama's failure to seek Congressional approval of U.S. military action in Libya, voted 123-295, largely along party lines, to reject the resolution endorsing U.S. involvement in the NATO-led mission.
But then it handed Obama a largely symbolic victory by rejecting 180-238 a Republican measure to bar the U.S. military from carrying out air strikes against Gaddafi's forces. Eighty-nine Republicans joined Democrats in opposing the bill.
Western governments are also concerned about the financial cost of the NATO operation and even its impact on world oil supplies with Libyan exports cut off.
The loss of Libyan oil output since February represented a greater disruption to global oil supply than the aftermath of Hurricane Katrina in 2005, an International Energy Agency official told Reuters Insider TV.
IEA Deputy head Richard Jones said the market was facing a possible shortfall of 1.8 million barrels per day for the remainder of June and 1.7 million for the next quarter.
"LIBYAN OASIS" FOR GADDAFI?
Analysts say part of the NATO strategy now appears to be directed at paving the way for a successful local uprising against Gaddafi in the capital Tripoli, where opponents run the gauntlet of tight security to stage "flash" protests.
NATO said on Friday it had taken out Gaddafi troops who had quietly occupied abandoned buildings in Brega over an unspecified period of time to create a "command and control hub to direct attacks against civilians" in Ajdabiya and Benghazi.
Libyan state TV reported NATO attacks in Brega and Zlitan.
In a defiant state television audio broadcast this week, Gaddafi said he would fight to the end, but a rebel spokesman was quoted on Friday as saying indirect negotiations were being pursued that could allow him to stay in Libya.
"We have no objection to him retreating to a Libyan oasis under international control," France's Le Figaro quoted Mahmoud Shammam, spokesman of the rebel National Transitional Council (NTC), as saying.
NTC Vice-Chairman Abdel Hafiz Ghoga confirmed to Reuters the existence of indirect talks, saying: "The NTC is not contacting Gaddafi's regime. It's the other way around.
"If the NTC believes that there is a political solution that involves the Gaddafi regime stepping down, and that includes the entire regime, to stop the bloodshed of innocent people that are being killed every day in Libya, then it may look at this political solution."
In the latest of a string of defections, 19 police and army officers were among a group of Libyan refugees who arrived in Tunisia by boat on Thursday, Tunisian news agency TAP reported.
Gaddafi allies have denounced such defections.
"Anyone who defects or refuses to take up arms is an apostate ... and this applies to all Libyans," preacher Mohamed al-Matri said in a live broadcast of the Friday sermon from Cordoba mosque in the town of Sirte.
In Benghazi, dozens of rebel supporters freed by Gaddafi arrived on a ship from Western Libya in an exchange that could mark the beginning of broader talks between the adversaries.
"These are mainly civilians ... Among them there are 51 people who were detained in Tripoli but were released by the government there so we brought them back," said Dibeh Fakhr, a spokeswoman for the International Committee of the Red Cross in Benghazi.
A rebel spokesman said the rebel authority had earlier released five Gaddafi prisoners as part of the transfer.
European leaders meeting in Brussels agreed that only an uprising in Tripoli could end the war.
(Additional reporting by David Alexander in Washington, Ahmed Tolba in Cairo, Joseph Nasr in Berlin, Souhail Karam in Rabat, Maria Golovnina in Benghazi; writing by Andrew Hammond and Mark John; Editing by Alistair Lyon)
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