U.S. Calls for Libyan Sanctions : Urges West to Halt Oil Equipment Sale Over Terrorism

The United States is urging the technologically advanced nations of Western Europe to stop selling Libya machinery and spare parts for its oil industry, in retaliation for its sponsorship of the terrorists who attacked the Rome and Vienna airports, officials said Tuesday.

The officials said the attempt to cripple Libyan leader Moammar Kadafi’s profitable oil industry, which produces the cash that allows Tripoli to bankroll international terrorism, is part of an economic and diplomatic offensive being carried out while contingency planning continues for possible military action against the radical regime.

Reagan Given Options

President Reagan, who is vacationing in Palm Springs, was sent a list of options Tuesday by the Joint Chiefs of Staff for a possible military response to the terrorist attacks at the Rome and Vienna airports, which took the lives of 14 bystanders, including five Americans. Administration officials said the options include air strikes against Libya, although they stressed that the use of armed force is not likely at this point.

The United States banned the sale of American petroleum equipment to Libya several years ago but was unable to persuade other nations to impose embargoes of their own, apparently because of the profits that could be made by trade with the Tripoli regime.

Blamed for Airport Raids

But in the wake of the Rome and Vienna attacks, Washington has renewed the effort to isolate Libya both economically and diplomatically. The United States blames Tripoli for the attacks, which U.S. officials say were carried out by the Abu Nidal organization, a radical Palestinian faction supported by Kadafi.

“When we imposed our sanctions on the Libyans, we asked other countries to do the same,” one State Department official said. “They were not as forthcoming as we might have wished. The Libyans are still getting from Europe machinery needed for maintenance of petroleum facilities. We would like to see that end.”

Officials said the oil industry appears to be the most vulnerable element of the Libyan economy. Although the United States is urging other sanctions as well, officials were unable to point to further diplomatic or economic steps that could do major damage to the oil-rich and sparsely populated North African nation.

A senior Administration official said the Pentagon maintains a wide range of contingency plans for possible action against Middle East terrorism. But he said he doubts that Reagan will decide to use military force at this time.

“In terms of live military options, there aren’t very many we can consider,” the official said. “One is that we could go after their terrorist training camps--destroy their infrastructure--but you don’t do much when you do that” because most terrorist facilities are inexpensive and easily replaced.

“The other thing you could do is go after Kadafi, but that would be a significant military operation which (Defense Secretary Caspar W.) Weinberger would probably oppose because it involves the commitment of U.S. military force,” he continued. “That’s a major operational risk for the U.S. to take that option, because it would have to have the backing of its allies . . . which we probably don’t have now.”

‘It’s Extremely Unlikely’

The official concluded: “If, in the face of the TWA hijacking (last June), we didn’t retaliate, I think it’s extremely unlikely we would do it in this case.”

Although the emphasis so far is on economic measures, the United States also is urging the rest of the world’s nations to recall their diplomats from Libya and to expel Libyan diplomats from their countries. Washington did this several years ago.

State Department spokesman Charles Redman said Tuesday that “greater international involvement is very useful and, indeed, in many cases crucial” to efforts to punish terrorism.

“Our sanctions included cutting off the sale of militarily useful aircraft, spare parts, oil pumping equipment,” Redman said. “So I believe there are still things that could be done if the international community is willing to come together and act.”

A Question of Cost

U.S. officials hope to convince American allies in Europe that the cost of doing business with Kadafi is higher than the cost of breaking relations with his regime.

The officials say the fear of terrorism has cost Mediterranean countries hundreds of millions of dollars in lost tourist revenue. They add that the Greek tourist industry alone has lost an estimated $300 million since the hijacking of TWA Flight 847, which originated in Athens, raised concern about the safety of travel to Greece.

“We are hoping that, if nothing else, these countries will come to realize that playing footsie with these people is hitting them in the pocketbooks,” one State Department official said.

The official said Italy may find it extremely difficult to sever all ties with Libya, a former Italian colony. Italians are believed to be the largest single group of foreign workers in Libya.

Italian Premier’s Words

U.S. officials were cheered by Italian Prime Minister Bettino Craxi’s strongly worded denunciations this week of states that support terrorism. But a democracy like Italy often cannot prevent its citizens from accepting high-paying jobs abroad.

One U.S. official said there are as many as 1,500 American citizens, including some petroleum technicians, still working in Libya despite the best efforts of the U.S. government to discourage their presence. Libya has sought American oil engineers because they are considered the world’s most proficient.

“We would be pleased to see their departure,” the official said dryly.

List of Terror Attacks

In a related development, the State Department issued a white paper accusing the Abu Nidal organization of conducting more than 60 terrorist attacks during the past eight years--with at least 30 of them in the last two years.

“The group has repeatedly demonstrated its ability to operate in any country it chooses,” the report said. “It has staged attacks in over 20 countries on three continents.”

The organization is a violent Palestinian splinter group that was expelled from the Palestine Liberation Organization a decade ago for rejecting PLO curbs on the use of terrorism outside Israel. Since then, the group has assassinated a number of PLO officials and has publicly threatened to assassinate PLO Chairman Yasser Arafat.

Norman Kempster reported from Washington and Michael Wines reported from Palm Springs.