Demonstrators flooded the streets of Tripoli and Benghazi in protest against federalism on Friday and one person was killed when an iconic market was set ablaze, a medic and AFP journalists said.
Thousands of people converged at the seaside courthouse of Benghazi chanting slogans against federalism and its chief advocate, Ahmed Zubair al-Senussi, an AFP photographer at the scene said.
Senussi is the head of the regional council seeking to secure autonomy for the Cyrenaica region, or Berqa in Arabic, in an initiative announced on Tuesday that has sparked fears the country might split up.
In Tripoli, thousands of people amassed in the symbolic Martyrs Square, singing "No, no to federalism" and "Libya is one," an AFP journalist at the scene said.
Earlier, a huge fire, thought to be the work of arsonists, ripped through a Benghazi furniture market and other blazes erupted in shops across the coastal city, an AFP correspondent reported.
A conference hall where advocates of federalism were expected to meet was also targeted, witnesses said.
The incidents sparked a heavy deployment of security forces.
"We do not know the motive for the incidents but investigations are underway," said Fawzi Wanis, head of the high security committee.
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"The fires appear to have been caused by arson," said another security official, Tareq Hassan al-Bakush.
Residents and firefighters joined forces to put out the flames at the furniture market while dozens of people were rushed to hospital.
"Fifty people were brought to hospital, all of them suffering from suffocation, four are in the intensive care unit, and one died," said doctor Widad Mohammed of the Martyrs hospital in Benghazi.
Shopkeepers in the charred market complex and residents blamed the acts of vandalism on supporters of federalism, claiming they set triggered the fires to get demonstrators of the streets.
"The advocates of federalism are the only ones who benefit if demonstrations are cancelled," said university professor Tariq al-Farjani.
"Even if they burn our homes, millions will come out against it," he added.
At a conference in Benghazi on Tuesday that was attended by thousands, tribal and political leaders unilaterally declared the region of Cyrenaica (Berqa in Arabic) autonomous, prompting fears that the country might split up.
Senussi was appointed chairman of the region's newly-formed governing council.
Libya was a federal union from 1951 to 1963 during the monarchy of Idris Senussi, which split the country into three states -- Cyrenaica, Tripolitania and Fezzan.