Battle lines in Libya harden

in Libya there are no incidents, now everything is quiet,” Gaddafi said.

His son, Seif al-Islam, again denied in a TV interview that the Libyan regime used force or airstrikes against its own people.

“Show me a single attack. Show me a single bomb,” he told ABC’s “This Week.” “The Libyan air force destroyed just the ammunition sites. That’s it.”

Human rights groups and European officials have put the death toll since unrest began in Libya nearly two weeks ago at hundreds — erhaps thousands — although it has been virtually impossible to verify the numbers.

The British-educated Seif al-Islam is the most visible of Gaddafi’s children and has been acting as a spokesman for the regime.

“The whole south is calm. The west is calm. The middle is calm. Even part of the east,” he said.

Asked about Obama’s call for his father to step down, he said: “It’s not an American business, that’s No. 1. Second, do they think this is a solution? Of course not.”

As for the U.S. freeze of Libyan assets, he said: “First of all, we don’t have money outside. We are a very modest family and everybody knows that.”

Libya’s Foreign Ministry said it regretted the UN Security Council resolution, saying it was based on “untrue media reports.”

Gaddafi loyalists remain in control of Tripoli, where most stores were closed and long lines formed outside the few banks open for business.

Residents thronged to the banks after state TV promised each family 500 Libyan dinars (about $400), plus the equivalent of about $100 credit for phone service. State TV also said families also will be entitled to 60,000 Libyan dinars (about $49,000) in interest-free loans to buy apartments.

State TV showed video of people handing over identity documents to bank tellers, who processed the information. Some people, however, said they only got vouchers when banks ran out of money.

Libya’s Central Bank said in a statement on state TV that payments will be made for the next few days. “Give banks a chance to secure the needed liquidity in its branches at the suitable time,” it said.

Former Justice Minister Mustafa Abdel-Jalil, who defected from the Gaddafi regime, said Saturday he was setting up a provisional government.

A prominent human rights lawyer, Abdel-Hafidh Ghoga, held a news conference to shoot down the claim, saying instead that politicians in the east were establishing the transitional council only to manage daily life in the rebel-controlled areas until Gaddafi falls.

UN Secretary-General Ban Ki-moon was due in Washington on Monday to discuss with Obama other possible measures that could be taken against the Libyan government.

U.S. Senators John McCain (R-Arizona) and Joseph Lieberman (I-Connecticut) said on CNN’s “State of the Union” that the United States and its allies should enforce a no-fly zone over Libya to prevent the military from again firing on civilian protesters from the air. Lieberman said Washington should arm the provisional government in rebel-held areas of eastern Libya “to fight on behalf of the people of Libya against a really cruel dictator.”

The White House had no immediate comment.

British and German military planes landed in Libya’s desert, rescuing hundreds of oil workers and civilians stranded at remote sites over the weekend, while thousands of other foreigners were still stuck in Tripoli by bad weather and red tape. The secret military missions signal the readiness of Western nations to disregard Libya’s territorial integrity when it comes to the safety of their citizens.

Thousands of Egyptian and Chinese expatriates, meanwhile, continued to stream out of Libya on its western border with Tunisia into camps near the frontier.