ANALYSIS - Libya rebel killing takes shine off opposition gains

LONDON (Reuters) - The still-unexplained killing of Libya's rebel military commander will further undermine outside confidence in an already fragmented opposition, with some suspecting an internal feud is to blame.

While information remained sketchy and few entirely rule out the possibility that Gaddafi loyalists somehow killed Abdel Fattah Younes, observers say divisions within the rebel movement were already growing before his death.

Having spent years in the Libyan leader's coterie during many crackdowns on opposition, Younes was always viewed as suspect by some members of the opposition movement.

Rumours he might have been feeding information back to Tripoli came on top of widespread discontent with the slow progress of fighting on Libya's eastern front, where opposition fighters have been bogged down around the oil port of Brega.

"The incident has already distracted opposition figures from the front line and is likely to compound their inability to take Brega," said Henry Smith, Libya analyst for London-based consultancy Control Risks. "Rivalries over the militia and military leadership have been apparent for months. An event such as this is likely to exacerbate them amid clear uncertainty."
As Younes' apparently burned and bullet-ridden body was marched through central Benghazi in a coffin on Friday, his family did not comment on who they believed the killers were but pledged allegiance to rebel political chief Mustafa Abdel Jalil.
"Recently it looked as if more unity of command had emerged (and) that may now be facilitated further by the removal of a potentially divisive military chief," said Daniel Korski, a senior policy fellow at the European Council on Foreign Relations and a long-term supporter of the war.
"But it nonetheless represents a propaganda coup for Colonel Gaddafi and those who have long dismissed the rebels as perpetually disorganised and incompetent."
Libyan rebels have made considerable advances in the western mountains and around the port of Misrata in recent months, but the eastern front has barely moved. Taking Brega and other key nearby port facilities is a key rebel aim as it might allow them to resume oil exports to gain much-needed cash.
Earlier this week, oil industry sources said the rebels had sold the last of the crude held in storage tanks near Tobruk and unless they take new ground and reopen closed facilities there is little prospect of more to come.
If they are unable to break a battlefield stalemate even with the help of foreign air power, the opposition and their NATO allies are seen hoping for either a negotiated Gaddafi exit, internal coup or Tripoli-based uprising to oust him.
"GROWING SIGNS OF SPLITS"
All of those options are likely to become less likely if the rebel movement is perceived to be breaking into factions or disintegrating just as a string of Western nations including Britain recognised them as the legitimate Libyan government.
"Definitely there are growing signs of splits within the rebels," said Alan Fraser, regional analyst for AKE, another London-based consultancy advising many companies in the oil sector.

"Sources on the ground have long been reporting signs of frustration... directed against each other and particularly the eastern front rebels who they feel are not doing enough to push forward."

But Fraser said there were also Gaddafi elements in the east carrying out clandestinely attacks who would have jumped at the chance to kill Younes, grabbing the chance to show how tenuous rebel control was even in their own heartland.

With French President Nicolas Sarkozy and U.S. President Barack Obama both facing elections next year and British Prime Minister David Cameron pressured by domestic scandal, the Western allies are likely to want the war to end fast.

"The noose is tightening around Gaddafi," said Anthony Skinner, regional analyst at consultancy Maplecroft, pointing to dwindling supplies in Tripoli and Gaddafi's apparent willingness to engage in discussion with NATO members.

"(But) the dynamic remains fluid... if a segment or fraction of the rebel movement was behind the assassination, then it underlines the fragility and complexity of relations and tribal divisions within the opposition... the toppling of Gaddafi requires union of purpose and endurance to stay the course."