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By Ayman al-Warfalli | BENGHAZI, Libya

BENGHAZI, Libya Libya's eastern military commander met the head of its U.N.-backed government on Tuesday, ending a 16-month standoff that has undermined diplomatic efforts to unify a country riven by factional fighting since 2011.

Having previously spurned invitations to engage with the government, Khalifa Haftar held talks with Fayez Seraj in Abu Dhabi that one source close to Haftar said produced an agreement to hold elections early next year.

Regional and Western powers have for months been pushing the two men to discuss resetting a U.N.-mediated agreement that led to the creation of Seraj's Government of National Accord (GNA) in Tripoli. The deal was an attempt to end the turmoil that followed the 2011 uprising against Muammar Gaddafi.

Haftar is the dominant figure for factions in eastern Libya that have rejected the GNA, contributing to its failure to expand its power in Tripoli and beyond. Rival armed factions in the west of the country have backed the government.

Tuesday's meeting could be a step toward ending a stalemate between competing loose alliances that pushed the country into open warfare in 2014. But any lasting deal would need backing from the numerous and powerful armed groups that have scuppered previous attempts to stabilize the oil-rich country.

There was no official statement as Tuesday's meeting ended, or comment from the GNA side.

Sources close to Haftar said he met Seraj one-on-one for two hours of talks they described as positive.

One sticking point has been a clause in the U.N.-mediated deal giving the GNA's leadership immediate control over military appointments, which eastern factions fear will weaken Haftar's Libyan National Army (LNA).

Libya's 218 channel, a pro-Haftar TV station, said they had agreed to propose cancelling the clause, and to form a restructured unity government.

"It was agreed to open permanent channels of communication and to form two working groups to complete an agreement on the details of the formation of a government and the military arrangements between officers from all regions," one source close to Haftar in Abu Dhabi who asked not to be named told Reuters.

There was also an agreement to hold presidential and parliamentary elections no later than March 2018, the source said.

DIVISIVE FIGURE

It was the first time Seraj and Haftar had met since the start of last year.

An expected meeting in Cairo in February fell through, though a roadmap for eastern and western parliamentary delegations to revive a peace process was agreed.

Haftar, a former Gaddafi ally, is a divisive figure who opponents suspect of seeking to return the country to authoritarian rule.

With backing from foreign powers including Egypt, the UAE and Russia, he has gained ground militarily since last year, taking control of several key oil ports and advancing in a long campaign against Islamist-led rivals in Benghazi, Libya's second city.

Haftar has also indicated that he expected to take Tripoli, though many observers doubt he has the capacity to do so.

As the LNA and its allies have pushed west in recent months, they have clashed repeatedly with GNA-aligned opponents around the oil ports and in the southern desert regions of Sabha and Jufra.

Haftar and his supporters have previously rejected the GNA because they say it is beholden to the militias that hold sway in Tripoli and the rest of western Libya.

(Writing by Aidan Lewis; editing by Patrick Markey and John Stonestreet)

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Rival Libyan kingpins break the ice in Abu Dhabi | Reuters - Reuters