World powers urge Libya factions ceasefire

European powers and the United States are pressing Libya's rival factions to set an unconditional ceasefire at talks on forming a unity government to halt the country's conflict.

The Islamist-backed Fajr Libya militia alliance seized Tripoli in August and installed a government and a parliament opposed to the elected legislature and the country's internationally-recognised government, both of which have taken refuge in the country's far east.

Talks are due to resume on Monday in Algiers and focus on the formation of a unity government as well as security issues.

"We strongly urge all participants to the dialogue to negotiate in good faith and use this opportunity to finalise agreements on the formation of a national unity government and make arrangements for an unconditional ceasefire," a US-European joint statement read.

The top diplomats warned the UN could slap sanctions on parties seen as threatening Libyan peace, stability or security.

Libya has been gripped by chaos and violence since its 2011 revolution that toppled dictator Muammar Gaddafi, with rival factions battling for control of its cities and oil wealth.