Libya's outgoing premier said Tuesday he would hand power to his rival and successor in "a week or two," after deadly fighting between a rogue ex-general and Islamists in their Benghazi stronghold.
Abdullah al-Thani had refused to recognise the new government of Ahmed Miitig, who convened a cabinet meeting Monday despite his objections.
Thani had previously said he would let the judiciary decide whether he should hand over power, citing appeals filed by MPs against the chaotic General National Congress vote in May that elected Miitig.
But on Tuesday he appeared to strike a conciliatory stance, saying he was ready to yield power.
Speaking at a press conference, Thani said he had "no dispute with Miitig's government," but that his "problem is with the General National Congress."
Even so, he stressed that, for the moment, his government was "still responsible for the daily management of the state," ending prospects of an immediate end to the crisis.
Former general Khalifa Haftar has exploited the confusion to rally support among the public, politicians and the army, analysts say, after he unleashed an offensive in the eastern city last month to purge Libya of the Islamists he brands "terrorists."
"When the state is absent, whoever emerges will be considered the country's last hope," said Othman Ben Sassi, a member of the now-disbanded Transitional National Council, the political arm of the rebellion that overthrew Moamer Kadhafi in 2011.
On Monday, as clashes raged in Benghazi between militants and forces loyal to Haftar, Miitig convened his ministers.
- Rival coup claims -
The GNC's vice-president, liberal MP Ezzedine al-Awami, called Miitig's installation as prime minister a "coup d'etat."
The Islamist-backed authorities have accused Haftar of launching a coup and denounced him as an outlaw.
Haftar denies this, saying he has no political ambitions and insisting, after thousands of Libyans rallied behind him, that he has a mandate from the people to pursue his offensive to crush "terrorism."
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Al-Qaeda in the Islamic Maghreb has urged Libyans to fight Haftar and his so-called National Army, labelling him an "enemy of Islam."
Neither of the rival premiers has publicly endorsed the ex-general's campaign, but both stated their determination to combat "terrorism," while stressing that all operations must take place within the law.
The UN mission in Libya called on the "authorities to take the initiative to tackle this phenomenon (terrorism) that is threatening the stability" of Libya, in a statement issued Tuesday.
Reflecting doubts about Haftar's real intentions, Ben Sassi said the rogue general had already been preparing his campaign before the latest political crisis erupted in Tripoli.
"The division within the ruling elite and the total absence of the state in Benghazi has given him more influence and support, allowing him to replace the state using the regular army and even the air force," which has sided with him, he said.
- Benghazi violence -
Miitig, a 42-year-old businessman without political affiliations, is backed by the Islamists in the GNC, which liberals have largely boycotted for months.
He is Libya's fifth prime minister since Kadhafi was toppled and killed in the NATO-backed uprising.
Miitig is due to lead the country to legislative elections on June 25, with the new parliament replacing the GNC and forming a new cabinet.
Observers say he is backed by the Islamists in parliament, who consider him the best guarantor of their political survival ahead of this month's vote.
"The face-off between Miitig and al-Thani illustrates the showdown between the Islamists and the liberals," said Iyad Ben Omar, a Libyan analyst.
"Both of them are clinging to power with the elections expected to take place in just a few weeks, which proves that they are pursuing their own political agendas," he added.
On the ground, schools and banks were shut in Benghazi Tuesday and the streets deserted after the worst fighting there since 76 people were killed in mid-May, when Haftar launched his "Operation Dignity."
Twenty-one people were killed on Monday, with hospital officials in the port city, saying at least 11 soldiers were among the dead. Another 112 people were wounded.
The number of Islamists killed was not known.