U.N. envoy confident Libya factions can seal deal around September 10

PARIS (Reuters) - The United Nations special envoy to Libya said he was optimistic that the country's two parliaments will be ready to agree on forming a unity government by mid-September, a vital step towards ending the political crisis and military conflict. The United Nations has been trying to persuade the country's warring factions for months to form a unity cabinet and end fighting across the country four years after the ousting of Muammar Gaddafi. Militant groups allied to each of the two administrations have brought the country's oil-dependent economy to its knees, and most of Libya is lawless and run by armed groups attached to neither government. "I continue to believe that around Sept. 10 we will be in a position to have a final agreement," Bernardino Leon told France 24 in an interview aired late on Wednesday. Leon is scheduled to hold a new round of talks in Morocco on Thursday to push the factions to agree on a deal, but the parliament based in Tripoli has so far refused to sign it. The elected House of Representatives, based in the east with the official government which fled Tripoli a year ago, signed a preliminary deal last month, but the head of the Tripoli delegation quit the talks on Wednesday. Both sides face divisions and pressure from hardliners. "There are important questions (remaining) for all parties, but I think we have never been as close as we are now, and it would be tragic that at a time when Libya is so close and the positions of both sides are so close that we are not able to conclude this accord." The U.N. proposal calls for a one-year unity government in which a council of ministers headed by a prime minister and two deputies would have executive authority. Libya's security has rapidly deteriorated as Islamic State and other armed groups not linked to either government exploit the power vacuum. "The priority is to conclude a political accord. Libya's main weapon against Islamic State is unity," Leon said, when asked whether there should be an international intervention to fight the group. (Reporting by John Irish; Editing by Dominic Evans)