UPDATE 5-New Libya interim government agreed in U.N. talks

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* New interim government to oversee run-up to elections

* Choice of team led by Menfi and Dbeibeh surprised analysts

* Many Libyans remain sceptical that move can unite country(Adds comment by U.N. chief, paragraph 5)

GENEVA/TRIPOLI, Feb 5 (Reuters) – U.N. sponsored talksproduced a new interim government for Libya on Friday aimed atresolving a decade of chaos, division and violence by holdingnational elections later this year.

Mohammed al-Menfi, a former diplomat from Benghazi, willhead a three-man presidency council, while Abdulhamid Dbeibeh,from the western city of Misrata, will head the government asprime minister.

Libya has been engulfed in chaos since a NATO-backedintervention ended Muammar Gaddafi’s four-decade rule in 2011and has been split since 2014 between warring administrationsbacked by foreign powers in the west and east.

However, with many factions in the country afraid tosurrender influence they already hold, and with foreign powersinvested in local allies, the new government may rapidly comeunder pressure.

“My appeal to everybody is to recognize and accept theseresults and to work with the new authorities that were elected,”U.N. Secretary-General Antonio Guterres said.

The appointment of a new government may also do little tochange the balance of military power on the ground, where armedgroups rule the streets and factions remain split between eastand west along a fortified front line.

“This is the last chance for the Libyan people and politicalleaders to end the conflict and division in the country. We hopeto reach the stage of elections, just as they have promised, toachieve the people’s demands,” said Gamal al-Fallah, a politicalactivist in Benghazi.

Analysts describe the new government team as surprisewinners of a leadership contest against three other groups ofcandidates presented to the 75 Libyan participants picked by theUnited Nations to take part in political talks.

A slate that included the eastern-based parliament headAguila Saleh and western-based interior minister Fathi Bashaghawas widely seen as the most likely to succeed but lost in arun-off by 39 votes to 34.

“This is certainly a shake-up, and as a result it will getsupport from groups that were preparing to fight Aguila orFathi,” said Tarek Megerisi, of the European Council on ForeignRelations.

PUBLIC PLEDGE

The winning leadership group also includes Musa al-Koni,from the south, and Abdullah al-Lafi, from the west, in thepresidency council. Bashagha tweeted his support for the processand for the new government after the vote.

All candidates for the new government promised to honour theplans to hold presidential and parliamentary elections on Dec.24 and not to run for office then. The U.N. publicly displayedtheir signed pledges.

Dbeibeh has until Feb. 26 to present a new government to theparliament, which then has three weeks to approve it.

The latest U.N. process emerged from a Berlin conferencelast year and gathered pace in the autumn after commanderKhalifa Haftar’s eastern-based forces were repelled from a14-month assault on Tripoli.

It has also involved a military ceasefire, but not all termsof the ceasefire have been met – a sign of continued mistrust onboth sides and internal fractures within both camps.

The new government may make it harder to bridge theeast-west divide, said analyst Jalel Harchaoui of theClingendael Institute.

Though born in the east, Menfi is seen as close politicallyto the current Tripoli government leadership and without strongties to Haftar or other eastern leaders, he added.

Some Libyans have been critical of a process which they viewas being managed from abroad and which they fear will allowexisting powermongers to cling to their influence.

“It’s just a painkiller to portray Libya as stable for awhile. But war and tension will certainly come back sooner orlater so long as militias have power,” said Abdulatifal-Zorgani, a 45-year old state employee in Tripoli.

Turkey, which backed the Tripoli government, and the UnitedArab Emirates and Egypt, which have supported Haftar, publiclywelcomed the new government.

(Reporting by Emma Farge and Stephanie Nebehay in Geneva,Reuters Libya newsroom in Tripoli and Ayman al-Warfali inBenghazi, additional reporting by Michelle Nichols in New York;writing by Angus McDowall; editing by John Stonestreet, PravinChar and Philippa Fletcher)

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