The president of Libya's highest political authority suspended Wednesday plans to assault rebels blockading oil terminals, giving them a two-week ultimatum to stand down or again face the prospect of military action.
On Monday, General National Congress (GNC) head Nuri Abu Sahmein had ordered an assault on rebels demanding regional autonomy in the east and who began exporting oil this week in defiance of the central government.
But on Wednesday, he said "we have decided to give an ultimatum of two weeks at the most" to lift the blockade.
He said military action was being suspended.
If the ultimatum is not respected, he said "the decision of the chief of the armed forces (Abu Sahmein himself) will be put into action by the Libyan army."
The developments came as Islamists, buoyed by parliament's ouster Tuesday of liberal-backed premier Ali Zeidan, moved to consolidate their newly found power.
Zeidan fled to Germany via Malta, government sources in Valletta said.
The GNC named Defence Minister Abdullah al-Thani caretaker premier.
But as Zeidan complained repeatedly while in office, real power over the armed forces lies not with Thani but with Abu Sahmein.
Ali al-Hassi, a spokesman for the eastern rebels, told AFP an offer for dialogue was made on Wednesday.
But "we will not accept unless Abu Sahmein withdraws his decision to attack," he said.
Thani, meanwhile, said "this problem will be resolved through dialogue," in an apparent departure from his predecessor, who refused to talk to the easterners.
In the absence of a large enough regular army force to take on the heavily armed rebels, the advance guard of the task force that was headed east is composed largely of militia loyal to the GNC.
Rebels of the Cyrenaica Defence Force withdrew to the eastern region's historic border late Tuesday after Libya Shield Force militiamen pushed them out of the central coastal city of Sirte, a rebel commander told AFP.
He warned that the offensive by the fighters, mostly from Libya's third city Misrata, risked plunging the North African country back into civil war.
"Our forces have pulled back to Wadi Lahmar," some 90 kilometres (60 miles) east of Sirte, he added.
The town lies on the historic border between Tripolitania and the Cyrenaica region, whose pre-1963 autonomy the rebels want restored.
The opposing forces were allies during the NATO-backed uprising of 2011 which toppled Moamer Kadhafi.
-Oil export terminals blockaded -
But the Cyrenaicans' move to load oil onto a North Korean-flagged tanker over the weekend in a deal not sanctioned by the state-run National Oil Corp prompted the GNC chief to authorise military action.
The rebels had been blockading the main eastern oil export terminals since July, but loading the Morning Glory and its escape out to sea was a major escalation and triggered Zeidan's ouster.
On Wednesday, Pyongyang denied any responsibility for the tanker's operations in Libya, saying the vessel had been leased to an Egyptian company.
The ship was operated by an Egypt-based company that was "allowed to temporarily use the DPRK (Democratic People's Republic of Korea) flag" under a contract with Pyongyang, state news agency KCNA reported.
It said Pyongyang had "cancelled and deleted the ship's DPRK registry... as the ship violated the DPRK's law on the registry of ships and the contract that prohibited it from transporting contraband cargo."
The rebels' prolonged blockade had already slashed oil exports from 1.5 million barrels per day to just 250,000.
The rebels are among the Islamists' most potent rivals, but also face competition from former rebels from the Zintan region, southwest of Tripoli, who backed Zeidan right up to his ouster.
Just hours after the GNC vote, the Islamist-controlled Tripoli military council ordered the "withdrawal of all forces occupying strategic positions, particularly inside Tripoli international airport and on the airport road".
That was a clear reference to the Zintan militia, which has been deployed at the airport since the uprising.