UNITED NATIONS — The U.S. and South Africa reached a deal Thursday that will release $1.5 billion in frozen Libyan assets in American banks which the U.S. is earmarking for the cash-strapped rebels fighting to oust Moammar Gadhafi.

South Africa had blocked agreement in the Security Council committee monitoring sanctions against Libya on unfreezing the money over concerns that it implied recognition of the opposition National Transitional Council. South Africa has not recognized the rebel government and said neither has the African Union nor the United Nations.

Mark Kornblau, spokesman for the U.S. Mission to the United Nations, said the U.S. never intended its request to unfreeze the Libyan assets to imply recognition of any government. He said the wording has been changed to say that the money will go to “relevant authorities.”

The United States had called for a vote Thursday afternoon on a Security Council resolution that would have authorized the release of the fund unless South Africa changed its mind.

Printed on Friday, August 26, 2011 as: Gadhafi's money given to rebel leadership.