U.N. Sanctions Spark Protests, Kadafi Threat : Terrorism: Crowds march, and Libya’s leader vows to withhold oil from nations supporting the curbs.

Crowds marched through Libya’s streets in staged demonstrations Wednesday to protest U.N. sanctions against their country, and Libyan leader Moammar Kadafi threatened to withhold oil from countries that join the embargo.

“Whoever does not support the cause of my people will have nothing: no oil and no business,” Kadafi told the Italian weekly magazine Europeo.

The Libyan Foreign Ministry challenged the legality of the U.N. Security Council’s vote Tuesday to impose an air and military embargo on Libya, arguing that Russia’s assumption of the council seat once held by the defunct Soviet Union had not been finalized.

Libya also suggested that the vote does not accurately reflect world opinion, pointing out that the countries that abstained in the vote--China, Morocco, Cape Verde, India and Zimbabwe--”represent three-quarters of the world’s population.”

The government said that the sanctions vote, adopted in the wake of Libya’s refusal to hand over six suspects accused in the fatal bombings of two passenger airliners, represents “the beginning of the end” for the United Nations.

“Masses from the basic people’s congresses and students from all municipalities . . . took to the streets this morning in demonstrations of anger and denunciation,” Libyan Radio reported. “The masses pledged to stand as an impregnable dam to thwart the imperialism against the Arab and Libyan people,” the radio said.

Officials from other Arab countries, who had sought a compromise or a World Court ruling in the case, were disheartened by the vote but said they will continue to try to reach a settlement before deciding whether to implement the sanctions.

“Yes, we will work for a compromise, but for compromise you need two parties who believe in compromise. We have only one. Libya has moved a lot, but Washington still has only one thing: Bring them here,” a senior Arab League official said glumly.

And U.N. Secretary General Boutros Boutros-Ghali will send a senior envoy to Libya on Friday to discuss the dispute, Arab diplomats said early today.

Libya had tentatively agreed last week to hand over to the Arab League two suspects accused in the 1988 bombing of a Pan American Airways jet over Lockerbie, Scotland, that killed all 259 people aboard and 11 on the ground. But Arab diplomatic sources indicated that the league would be compelled to turn the men over to either Britain or the United States.

The United Nations is also pressuring Libya to cooperate with French judicial authorities investigating the bombing of a UTA airliner over Central Africa in 1989 that killed 170 people. France has accused four Libyans, including Kadafi’s brother-in-law, of involvement in that incident.

“What will the Arab League do with them if it takes them?” one official in Cairo said. “The Arab League is not a country; the Arab League is a regional organization. If they are delivered to the Arab League office in any country, then that country will be obligated to turn them over. Any country that accepts these two suspects would be putting themselves in a mess, a corner.”

In an official statement Wednesday, the Arab League said it regrets the sanctions vote and called for continuing efforts to achieve a legal resolution of the crisis, preferably through the World Court. The court, which sits in The Hague, in the Netherlands, has heard arguments on Libya’s claim that the United Nations has no jurisdiction and that two Lockerbie suspects should be tried in Libya, but it has not yet issued a ruling.

Sentiment throughout the Arab world appeared to be largely in Libya’s corner, even within the largely pro-Western Persian Gulf countries.

Jordan, Iraq, Tunisia, the Palestine Liberation Organization, Syria and Lebanon all criticized the sanctions, which would halt all commercial flights to and from Tripoli, impose an embargo on military supplies and cut back international diplomatic staffs at Libyan missions.

Tunisia said Wednesday that its sea and land links with neighboring Libya will remain open. Iran, a non-Arab country, had said earlier this week that it would inaugurate air service to Tripoli on April 15, the day on which the sanctions are to begin.

Kadafi, meanwhile, sought better relations with Iraq, which is currently struggling against U.N. sanctions imposed 20 months ago after its troops invaded Kuwait. In a letter to Iraqi President Saddam Hussein, Kadafi stressed the “importance of promoting” relations between Libya and Iraq, the state-run Iraqi News Agency said Wednesday.

In Cairo, diplomats said Arab countries face a dilemma in the coming two weeks over whether to adopt the sanctions if a settlement is not reached.

“Basically, the Arabs are trying to promote Arab unity, and they feel they have to commend Libya for offering to hand (the suspects) up to the Arab League, because it’s a brother Arab state. But at the same time, they don’t feel like they can defy the U.N. after over 40 years of urging Israel to respect the U.N. Security Council,” one Western envoy said.

Diplomats in Tripoli, reached by telephone, said it is unlikely the initial sanctions would have much effect on the Libyan government, which has adequate military supplies and can rely on private jets for government travel. But Kadafi, despite his blustering attempts to use Libyan oil as a bargaining tactic, fears the sanctions could escalate into a full economic embargo, possibly cutting off oil revenues that make up 95% of Libya’s foreign earnings.