The political and security vacuum in Libya is being exploited by the Islamic State group which has "significantly expanded" the territory it controls in the conflict-torn north African nation, UN experts have said in a new report.
The experts monitoring UN sanctions against Libya said the militant group has successfully recruited marginalised communities in the central city of Sirte, which it controls.
It has also increased its operational capacity in the city of Sabratha and the capital, Tripoli, through local recruitment reinforced by foreign fighters, the experts said on Thursday.
"While IS does not currently generate direct revenue from the exploitation of oil in Libya, its attacks against oil installations seriously compromise the country's economic stability," the six-member panel said in the report.
"Libyans have increasingly fallen victim to the terrorist group's brutalities, culminating in several mass killings."
Libya has effectively been a failed state since the 2011 ousting and death of longtime ruler Muammar Gaddafi, which led to the country's military collapse and fragmentation by powerful militias.
|Libya has become increasingly attractive to foreign fighters and their presence in the south is symptomatic of the regional dimension of the conflict|
|What's been going on in Libya?|
The General National Congress was the Islamist-led elected body ruling Libya for two years following Gaddafi's ousting and death. After its 18-month deadline to form a new constitution passed in January 2014, the body resolved to extend its mandate.
Since 2014, an internationally recognised government has convened in the far east of the vast, oil-rich country, while a rival Islamist government is based in Tripoli.
The United Nations has been trying to help forge a unity government to revive services to millions of people and confront IS extremists.
According to the experts, Libya has become increasingly attractive to foreign fighters and their presence in the south "is symptomatic of the regional dimension of the conflict".
It added that countries in the region have been providing political support - and possibly more - to various groups, further fuelling the continuation of fighting.
The report to the UN Security Council said all parties in the conflict were continuing to receive illicit arms transfers, some with support from UN member countries.
These weapons are not only influencing the instability but are having "a negative impact on the security situation in Libya and its political transition," the report said.
The experts called for the arms embargo - which allows the government to seek exemptions - to remain in place and be more strictly enforced.
As for the financing of Libyan armed groups, the report said "government salaries are continuing to be paid to enlisted combatants, regardless of their human rights record or their ties with spoilers or terrorist groups".
The experts said armed groups and criminal networks in Libya have further diversified their sources of financing, including through kidnapping and smuggling migrants, oil products, subsidised goods and profits from foreign currency exchange schemes.
As for other sanctions, the report said asset freezes and travel bans on individuals from the Gaddafi regime continue to be broken, with large amounts of assets remaining hidden and unfrozen and travel bans repeatedly violated.
The report comes as President Obama appeared to criticise European leaders, particularly British Prime Minister David Cameron and former French President Nicolas Sarkozy, for failing to follow up the NATO-led military intervention that led to Gaddafi's fall with state-building measures.