(Updates with U.S. house defeating move to stop funds)
* Italian PM says opposed to military intervention
* Lull in fighting after rebel offensives
* Senior Chinese diplomat visits rebel headquarters
* UN chief tells Gaddafi: listen to Libyan people
* Move to stop U.S. funding defeated in Congress
By Lamine Chikhi
TRIPOLI, July 7 (Reuters) - Italian Prime Minister Silvio Berlusconi said on Thursday he was against NATO intervention in Libya but had to go along with it, an admission that exposed the fragility of the alliance trying to unseat Muammar Gaddafi.
NATO warplanes have been bombing Libya under a U.N. mandate, but the alliance is under mounting strain because of the cost of the operation and the failure, after more than three months, to produce a decisive outcome.
“I was against this measure,” Berlusconi said. “I had my hands tied by the vote of the parliament of my country. But I was against and I am against this intervention which will end in a way that no-one knows.”
Some of the alliance bombing missions over Libya take off from military airbases in Italy.
There was no suggestion following Berlusconi’s comments that Rome would withdraw the use of the bases. But Defence Minister Ignazio La Russa said that the cost to Italy of the Libya operation would fall from 142 million euros in the first half of the year to less than 60 million euros in the second half as part of general defence spending cuts.
He said after a cabinet meeting on Thursday the aircraft carrier Garibaldi with three aircraft on board had been withdrawn, and their tasks would be taken on by land-based aircraft.
The comments from Rome came just a day after Libyan rebels made a big push toward Tripoli on two fronts.
More on Libya [nLDE75M18K]
More on Middle East unrest [ID:nTOPMEAST]
Speaking at a book presentation in Rome, Berlusconi said: “I went to Paris and I said — I can repeat this — I would have stood with Mrs Merkel as far as this decision to intervene in the no fly zone is concerned.”
He appeared to be referring to a March 19 meeting at which several Western powers decided to launch the military intervention. German Chancellor Angela Merkel chose not to involve her country in the operation.
“We posed very precise questions to the protagonists of this initiative — that’s to say President Sarkozy and Prime Minister David Cameron — in the most recent meeting of the heads of government in Brussels,” he said.
“The answer was that the war will end when there is, as we expect, a revolt by the population of Tripoli against the current regime.”
A move to stop funding for President Barack Obama’s military intervention in Libya was narrowly defeated in the U.S. House of Representatives.
Both political parties split over the measure, highlighting how tensions over U.S. involvement in Libya’s civil war have crossed party lines and created unusual alliances.
Republicans and Democrats argued that President Obama violated the U.S. Constitution and the 1973 War Powers Resolution by failing to secure congressional authorization for U.S. military operations in the north African country.
Gaddafi has rejected any suggestion that he will give up power and he has described the NATO campaign as an act of colonial aggression aimed at stealing Libya’s oil.
Potentially adding to the pressure on Italy to review its stance on Libya, a senior Libyan government spokesman said negotiations had begun with Russian and Chinese firms to take over the role of Italian energy firm ENI (ENI.MI) in oil and gas projects. [ID:nLDE76615J]
U.N. Secretary General Ban Ki-moon urged Gaddafi — who has dismissed rebels trying to end his four-decade rule as criminals and vermin — to listen to the will of the people.
“We are far from reaching an agreement to reach an end to the conflict but the negotiating process is ongoing,” Ban told reporters in Geneva. “He (Gaddafi) has to listen much more attentively and seriously what would be the best for the future of the Libyan people.”
Rebel fighters trying to advance towards the capital Tripoli launched offensives on two fronts on Wednesday and made significant gains. But analysts said the advances were not yet enough to shift the military balance against Gaddafi.
In the Western Mountains southwest of Tripoli, fighters pushed pro-Gaddafi forces out of the village of al-Qawalish, clearing the way for them to try to seize control of the main highway heading north to the capital.
Colonel Juma Ibrahim, a rebel commander in the nearby town of Zintan, said seven rebel fighters were killed in the operation and 30 wounded.
He said the capture of al-Qawalish meant other villages and towns in the region were no longer in the range of government rockets and artillery. “It will let the people return to their houses,” he said.
The slow push toward the capital would continue, he said.
“All fronts are quiet. Each side is making preparations for the next round. This is the quiet before the storm.”
A rebel spokesman in Nalut by the border with Tunisia said a rebel tank hit and destroyed a loyalist car carrying weapons north of the rebel-held town.
Further north, on Libya’s Mediterranean coast, rebel fighters on Wednesday advanced west from Misrata to within about 13 km of Zlitan — one of a chain of government-controlled towns blocking their advance to Tripoli.
A Reuters reporter near the front line on Thursday said there was now a lull in the fighting, although he could hear a few explosions.
Rebels at the front will need more ammunition, a minister with the National Transitional Council said while on a visit to Misrata.
“There is enough to run the front for the time being but we need more,” Minister of Health Nagi Barakah said at a news conference.
Gaddafi’s military capabilities have been severely hurt by the bombing, NATO military spokesman Mike Bracken said.
NATO had “degraded Gaddafi’s military capacity to the point that he is no longer capable of running any major military operation,” he said.
There were also signs Gaddafi may try to turn Friday prayers in Tripoli into a pro-government demonstration. Libyan TV broadcast calls from tribal leaders urging people in the capital to gather at the city’s Green Square for prayers.
A post on a Facebook page used by anti-Gaddafi activists said it was possible the authorities would close mosques in the capital to force people to gather in the square.
However, anti-Gaddafi rebels received a fresh diplomatic boost when China sent a senior diplomat to meet the rebel leadership in the eastern Libyan city of Benghazi.
The visit by Chen Xiaodong, China’s foreign ministry chief for North African affairs, was the second official meeting between China and Libyan opposition leaders in less than a month.
“China believes that the present situation cannot go on and a political resolution to find a way out of the Libyan crisis must be found as soon as possible,” Foreign Ministry spokesman Hong Lei said at a regular news briefing in Beijing.
There were reports this week that Gaddafi — under pressure from the five-month-old uprising against his rule, sanctions and the NATO bombing campaign — was seeking a deal under which he would step down.
His government has denied any such negotiations are underway, and NATO’s chief said he had no confirmation that Gaddafi was looking for a deal to relinquish power. (Additional reporting by James Mackenzie in Rome, Nick Carey in Misrata, Peter Graff in Al-Qawalish, William Maclean in London, Stephanie Nebehay in Geneva, Michael Martina in Beijing, Joseph Nasr in Berlin; Writing by Christian Lowe and David Dolan; Editing by Elizabeth Fullerton)