The late dictator Moamar Kaddafi loved to buy military equipment, and he did so constantly and in far larger quantities than Libya required or could even operate. Most of this stuff was never used. For decades there were thousands of armored vehicles and warplanes sitting around in remote bases with no one to maintain them. There were dozens of military bases with locked warehouses full of assault rifles, machine-guns, mortars, and portable missiles that were never issued or touched. Some of this stuff was shipped to other African countries, to arm local rebels that Kaddafi supported (usually against local leaders Kaddafi did not get along with).
After the revolution two years ago, many of these weapons were stolen and ended up on the black market. These are showing up all over the region as smugglers get them out of Libya and to buyers who can pay. Most of the Kaddafi weapons hoard was seized by the new Libyan government (or pro-government militias that did not hand them over to the black market) and many of these are being sold to Gulf Arab states that are supplying them to Syrian rebels. The weapons shipments are technically illegal because of sanctions against Syria, but Turkey looks the other way as the arms are flown in or come by ship mixed in with relief supplies. Libyan arms dealers approved by the Libyan government are allowed to broker sales of weapons to approved buyers (mainly wealthy Arab oil states who back the Syrian rebels).
A month ago the government launched an offensive against dozens of troublesome militias and, not surprisingly, the main battleground has been Benghazi. There the militias are fighting back and the government has sent additional troops in to help police and pro-government militias maintain law and order. In reaction to this many militias with known anti-government attitudes have abandoned their compounds, gone underground, and begun fighting as terrorists against government security forces (police, soldiers, and pro-government militias and vigilantes). Some of the rebel militiamen believe that the new government is too close to members of the old Kaddafi government. This is largely paranoia, but it is a popular delusion, especially when it justifies the increasingly criminal behavior (larceny and extortion) practiced by many militiamen. The militias now fear the population in general, which has become very hostile to the misbehaving former rebels. Many Libyan families have obtained weapons (assault rifles and pistols) during the rebellion two years ago and have recently shown a willingness to grab those weapons and turn on the hated militias. The government has called on neighborhoods to organize local defense units and cooperate with the security forces in halting the militia violence.
The rebel militias are also attacking media outlets that disagree with them. While many of these rogue militias are turning into criminal gangs (a common historical phenomena worldwide) some are becoming allies with Islamic terror groups. A small number of the rebel militias were run by Islamic radicals and these have since become increasingly dangerous because these groups want to turn Libya into a religious dictatorship. Since Kaddafi was overthrown in 2011, Libya has turned into something of a sanctuary for Islamic terrorists. Not so much because the government allowed it, but more because the government could not prevent it. Benghazi was the largest urban area that was hospitable to Islamic terrorists, mainly because it was the last large city to have law and order restored by government security forces (and pro-government armed groups). That battle is still going on. Meanwhile in the south (away from the narrow “green” coastal area) the vast and thinly populated semi-desert and desert areas will not come under any government control for some time. In these badlands the Islamic terror groups can operate more freely. The terrorists are not invisible down there, they need supplies and visit nearby settlements to obtain what they require. Overhead the terrorists are vulnerable to air reconnaissance (via vidcams and electronic monitoring). The south is the next big battleground for a much longer war.
Several demonstrations have blockaded oil fields and export terminals and cut oil production by a third. The demonstrators go after the oil facilities because that is sure to get the attention of the government and some action on their grievances. The complaints are usually economic and the solution is usually the government hiring more local men to work at the oil facilities. Deals are usually worked out and production resumed. The job disputes are often over who will be hired to provide security. Foreigners handle most of the technical jobs because few Libyans are qualified for this work. But security is another matter and rival militias battle each other and whoever the current oil field security people are to obtain these jobs.
The loss of oil income has nationwide implications because most Libyans rely on the oil revenue to support their living standards. Most Libyans want their Kaddafi-era welfare state back but bigger and better. Kaddafi held power for so long, despite his bizarre behavior and mismanagement, by spending over half the oil income on a shabby, but effective enough, welfare state. Anyone who misbehaved had their benefits cut off. Kaddafi would also cut benefits for the extended family of those who opposed him. This was a remarkably effective way to run a police state. With Kaddafi and his secret police gone, people still want their welfare state and not a shabby one either. But without control of the entire country and full oil production, the new government has no way to deliver the expected goodies. Then there's the corruption, with many militia leaders inclined to grab local welfare funds for themselves. The new Libya is a work in progress and will probably continue to be one for some time.
June 19, 2013: A 3 AM bomb destroyed a police station in Benghazi. This was likely carried out by militiamen or gangsters trying to halt the growth of police capabilities (which are mainly directed at shutting down criminal gangs and anti-government militias).
June 16, 2013: In southern Tunisia police arrested a Libyan Islamic terrorist leader who was part of a group of Islamic radicals operating in the Atlas Mountains near the Kasserine Pass since late last year.
In the eastern city of Derna a judge was shot dead by an assassin. The courts resumed operation in many parts of the country recently and anti-government and other criminal groups are trying to avoid prosecution by intimidating judges and prosecutors.
June 15, 2013: In Benghazi six soldiers were killed during a battle with hostile militiamen.
June 14, 2013: South of the capital (near the town of Kira) pro-Kaddafi gunmen ambushed an army convoy and killed a colonel. Three of the attackers were killed by return fire.
June 11, 2013: In the capital someone attached a bomb to the car of Italian diplomats. The bomb was spotted and people moved away before it exploded (wounding two children). Islamic terrorists were believed responsible.