The fighting has interfered with oil exports and without that income the country is broke. The country needs peace so that the oil facilities, the central bank and the network of government offices that pay government employees and import goods for distribution to most Libyans can function. While not all Libyans support any one government or leader, most do support restoration of the Kaddafi era welfare system and the oil revenues that paid for it. This was an efficient way to distribute the oil income so that most Libyans benefitted from it. During the decades of Kaddafi rule Libyans became dependent on these benefits and are angry at anyone who is harming this system. The Islamic terrorist militias sense they are facing a real threat because of the widespread hostility they face from Libyans concerned about surviving without the oil income. One of the things that annoys most Libyans is the lack of unity among the Islamic terrorist groups, each of whom considers themselves the anointed (by God) leader of an Islamic renaissance. This is a common pattern and the resulting feuds and outright wars between Islamic terrorist factions is a major reason why these groups rarely achieve much success. Too many of these Islamic terror groups are willing to interfere with, or even ban, free food sent in by foreign aid groups. Thus the locals see these holy warriors sending Libya straight to hell on earth.
Militias affiliated with ISIL (Islamic State in Iraq and the Levant) are generally opposed to any peace deal that does not involve everyone agreeing to ISIL ruling all of Libya. Most other Islamic terror groups are at least open to negotiations and some kind of deal. The best example of this in action can be found in the coastal city of Sirte (500 kilometers east of Tripoli and 560 kilometers west of Benghazi). Fighting between ISIL and local Islamic terrorist groups, soon reinforced by militias from elsewhere, has left the city in chaos and caused over 1,300 casualties so far. ISIL has resorted to its usual savagery with public executions and random acts of terror. So far the locals are not willing to submit or flee. In July Islamic terrorist groups affiliated with ISIL claimed to have control of this city. That proved to be overly optimistic. Sirte had a population of 100,000 in 2011 and was former dictator Kaddafi's birthplace. Before 2011 it was full of his well-cared for Kaddafi supporters. Sirte was heavily damaged and looted during the 2011 rebellion. Most of the population fled that chaos and when they returned they found a much less prosperous lifestyle. This caused some of the locals to arm themselves and misbehave. The continued anarchy in Sirte made it possible for many Islamic terrorist groups to establish themselves there. Kaddafi was a religious man as were many of his followers and some of those now became fans of Islamic terrorism. Until 2014 there was nothing to unify the many factions in Sirte. Then ISIL came along and some Sirte based Islamic terrorist militias have pledged allegiance to ISIL. Soon after that ISIL began enforcing their strict lifestyle rules (including how women are to dress and act) there and public punishment (including execution) for those who refuse to comply. This soon backfired and since early August ISIL has been on the defensive in Sirte as the majority of armed factions there fight back. The Libyan governments in Tobruk and Tripoli are using the Sirte situation to try and convince the UN to lift the arms embargo and encourage countries to provide air strikes against ISIL. Meanwhile most of these Islamic terrorist militias, who are loyal to the Tripoli government, have agreed to halt their attacks on ISIL forces in Sirte. The pro-Tripoli forces will defend themselves if attacked but otherwise will give peace a chance.
September 23, 2015: The Tobruk government has asked the UN to delay its ceasefire until an offensive in Benghazi, against Islamic terrorists, is completed.
September 22, 2015: Egypt and Algeria are calling on the Tobruk government to halt its offensive in Benghazi. This would put more pressure on the Tripoli government to get its dissident factions in line and agree to the UN sponsored peace deal.
September 21, 2015: Tunisia said it would no longer allow flights from Libyan airports in Mitiga, Misrata and Sirte to land in Tunisia. This is another effort to keep Islamic terrorists from Libya out. This effort includes construction of a 160 kilometer long barrier along the Libyan border. This barrier incorporates berms (sand or earthen walls), fencing and moats filled with salt water. This barrier not only keeps many Islamic terrorists out but also illegal migrants seeking to reach Europe.
September 19, 2015: The head of the Tobruk government military (Khalifa Belgacem Hiftar) announced another major offensive to push the remaining Islamic terrorists out of Benghazi. Hiftar is considered at odds with the UN peace effort because the UN is asking everyone to stop fighting. That only works for the forces that obey the two governments (in Tripoli and Tobruk). Most of the Islamic terrorist militias answer only to God or, occasionally, some larger Islamic terror organization like al Qaeda or ISIL. Hiftar sees the Islamic terrorists in Benghazi as a permanent threat to peace in the second-largest city in the country and is determined to deal with this problem. Hiftar became head of the Tobruk military in early 2015. Until then Hiftar was, technically, just another self-made warlord. Because he was a former Kaddafi general and long-time Kaddafi opponent Hiftar managed to create a coalition of tribal militias and army units in late 2013 and proved to be very effective fighting the Islamic terrorists in eastern Libya. Since early 2014 Hiftar has managed to get most of the post-Kaddafi armed forces under his control and backs Tobruk pleas for foreign assistance in obtaining more weapons and other military supplies. Hiftar has been very effective. He is a career military man and speaks with experience in these matters. One big advantage Hiftar has is that he takes care of his troops and uses tactics that minimize casualties among his troops. This makes Hiftar very popular with forces he controls and makes it easier to attract new factions (usually tribal militias).
September 18, 2015: In Tripoli ISIL gunmen attacked the last functioning airport for the city. The objective was a prison on the airport grounds. The attack was repulsed with eight ISIL men and three security personnel killed.
September 17, 2015: The Tripoli government seized a small (5,000 DWT) Russian owned tanker that was attempting to smuggle oil from the port of Zuwara (60 kilometers from the Tunisian border). Not much oil (about 5,000 liters/32 barrels) was involved and the shipping company denies the charge. Smuggling small quantities of oil out of Libya has become more important as various militias controlling small coastal areas run out of cash and everything else.
In Tripoli armed men from a dissident militia attacked the parliament building in an effort to intimidate members of parliament.
September 16, 2015: The Tobruk government threatened to block oil exports by the rival Tripoli government and warned foreign companies that their oil tankers and crews were at risk if they defied this ban. This is part of an effort to deprive the Tripoli government of their main source of income (oil sales). This began in January when Tobruk forces seized the Benghazi branch of the Libyan Central Bank and began looking for bankers to run a new Central Bank headquarters outside Tripoli. The Central Bank (which controls over $80 billion in cash and gold reserves) headquarters remained in Tripoli for so long because bank officials managed to convince the UN that they were neutral and trying to continue paying government salaries and bills for essential imports. This worked for a while because the UN believed that recognizing the “functional neutrality” of the Central Bank would help achieve a peace deal with the Tripoli government. Because of that the UN initially criticized the seizure of the Benghazi branch. The Tobruk government insisted the Benghazi seizure was done, in part, to prevent Islamic terrorist groups from attacking the branch, whose vaults contain a lot of cash (and remained intact and under guard.) Since then the UN found that the Tripoli government has become paralyzed by factional disagreements and many international financial institutions, like the IMF, agree. So the Tobruk government effort to gain sole control of the Central Bank is succeeding. That will lead to Tobruk getting sole control over the National Oil Company as well.
September 14, 2015: ISIL released a video showing a man in Benghazi being executed by ISIL gunmen. The dead man was accused of spying for the Tobruk government.
September 7, 2015: Islamic terrorist gunmen attacked an army checkpoint outside Benghazi, killing seven soldiers. This was a rare flare-up of violence in this area, where that has been something of a ceasefire for weeks.