BENGHAZI, Libya (AP) -- Protesters demanding Moammar Gadhafi's ouster came under a hail of bullets Friday when pro-regime militiamen opened fire to st

US closes Libya embassy, freezes Gadhafi assets

Libyan American demonstrators raise a pre-Gadhafi era Libyan flag at the Libyan ambassador's residence in Washington, Friday, Feb. 25, 2011.

WASHINGTON (AP) -- The Obama administration on Friday shuttered the U.S. Embassy in Libya and froze all assets held in the United States by the Libyan government, Moammar Gadhafi and four of his children, ending days of cautious condemnation by all but calling for the unpredictable leader's immediate ouster.

President Barack Obama said the sanctions were justified by Libya's "continued violation of human rights, brutalization of its people and outrageous threats" that have drawn condemnation from the world.

"By any measure, Moammar Gadhafi's government has violated international norms and common decency and must be held accountable," Obama said in a statement announcing the penalties.

He said the sanctions were designed to target Gadhafi's government and protecting the assets of Libya's people from being looted by the regime.

In an executive order detailing the sanctions and signed by Obama, the president said the instability in Libya constituted an "unusual and extraordinary threat" to U.S. national security and foreign policy.

The sharper U.S. tone and pledges of tough action came after American diplomatic personnel were evacuated from the capital of Tripoli aboard a chartered ferry and a chartered airplane, escorting them away from the violence to Malta and Turkey. As they left, fighting raged on in Tripoli and elsewhere in Libya as Gadhafi vowed to crush the rebellion that now controls large parts of the country.

With U.S. diplomats and others out of harm's way, the administration moved swiftly. Shortly after the chartered plane left Libyan airspace, White House spokesman Jay Carney said the U.S. had been constrained in moving against Gadhafi and his loyalists due to concerns over the safety of Americans but was now ready to bring more pressure on the government to halt its attacks on opponents.

"It's clear that Colonel Gadhafi has lost the confidence of his people," Carney told reporters. "He is overseeing the brutal treatment of his people, the fatal violence against his own people and his legitimacy has been reduced to zero in the eyes of his people."

The U.S. put an immediate freeze on all assets of Gadhafi's regime and the Libyan government held in American banks and other U.S. institutions.

The sanctions apply also apply to assets held in the U.S. by Gadhafi and three sons - heir apparent Seif al-Islam, Khamis and Muatassim - and a daughter, Aisha. The order also directs the secretaries of state and treasury to identify other individuals who are senior officials of the Libyan government, children of Gadhafi and others involved in the violence.

Stuart Levey, undersecretary for terrorism at the Treasury Department, said officials believe "substantial sums of money" will be frozen under the order. He declined to give an estimate.

Carney said sanctions would "make it clear that the regime has to stop its abuses, it has to stop the bloodshed." International officials say thousands may be dead.

But the hesitancy to outline the full range of U.S. punishments reflected in part the administration's skepticism that it had many options to influence Gadhafi. The 68-year-old has had a rocky relationship with the West, and American officials are worried about his unpredictability as he desperately seeks to maintain his four-decade grip on power.

U.S. military action is considered unlikely, although the Obama administration has not ruled out participation in an internationally administered protective no-fly zone.

Carney said some sanctions would be unilateral, and others would be coordinated with international allies and the United Nations, whose chief, Ban Ki-moon, was invited to Washington for Monday talks with Obama. Carney cited U.N. negotiations on a possible weapons embargo.

The Treasury Department had already ordered American banks to scrutinize accounts linked to senior Libyan officials and inform authorities of any attempts to misappropriate or divert public funds.

The U.S. suspended operations at its Tripoli embassy after a chartered flight took the last embassy staff out of the country at 1:49 p.m. EST. That followed a ferry that departed earlier Friday and arrived in Malta with nearly 338 passengers aboard, including 183 Americans.

The U.S., however, did not break diplomatic relations with Libya because it wants to retain the ability to communicate directly with Libyan officials to appeal for restraint and an end to the violence, State Department officials said. The embassy will be re-opened once security conditions permit, they said.

The administration stressed that the U.S. pressure was part of a broader movement to bring peace to Libya, with several officials saying the international community was speaking with a single voice on the matter. Secretary of State Hillary Rodham Clinton is headed to Switzerland on Sunday to meet foreign policy chiefs from key allies. Officials said she might announce specifics of the U.S. sanctions on Monday.

But whereas French President Nicolas Sarkozy told Gadhafi to step down, the U.S. refrained - just barely - from a similar declaration.

"The status quo is simply neither tenable nor acceptable," Carney said. "The Libyan people deserve a government now that protects the safety of its citizens, is responsive to their aspirations and is broadly representative."

Obama was briefing world leaders on U.S. plans and coordinating the international pressure on Gadhafi's government. He spoke Friday with Turkish Prime Minister Recep Tayyip Erdogan and they discussed measures to hold Libya's government accountable for its "unacceptable" violence. That followed Thursday's discussions with leaders from Britain, France and Italy.

The U.S. maintained a stiff embargo against Libya for years, calling it a terrorist sponsor. Washington eased restrictions over the past several years in recognition of Gadhafi's decision to renounce his nuclear weapons program and his cooperation in anti-terror operations. Carney said the U.S. would suspend the limited military cooperation it had with the country.

Libya ranks among the world's most corrupt countries and has enormous assets to plunder. Confidential State Department cables suggest that U.S. banks manage hundreds of millions in Libyan assets and the government has built a multibillion-dollar wealth fund from oil sales.

In Geneva, U.S. diplomats joined a unanimous condemnation of Libya at the U.N. Human Rights Council, which launched an investigation into possible crimes against humanity by Gadhafi's regime and recommended Libya's suspension from the body.

The U.N. Security Council in New York was discussing action simultaneously Friday, and NATO was talking about deploying ships and surveillance aircraft to the Mediterranean Sea.

Carney insisted the sanctions could work.

"Sanctions that affect the senior political leadership of a regime like Libya have been shown to have an effect," he said. We are also ... pursuing actions that will ensure that the perpetrators of violations of human rights are held accountable."