Turkey said on Friday it supported a proposal to release $3 billion of frozen Libyan assets to help civilians on both sides of the civil war prepare for the Muslim fasting month of Ramadan.

Speaking at the opening of a international contact group on Libya meeting in Istanbul, Foreign Minister Ahmet Davutoglu said the humanitarian situation was a cause of "grave concern".

The request for access to the frozen funds had come from the Libyan opposition Transitional National Council (TNC) in Benghazi.

"We see merit in the suggestion of the Transitional National Council for the release of $3 billion from the frozen assets of Libya under U.N. supervision," Davutoglu said in an address to delegations from 27 countries and representatives of international and regional organisations.

He said the money should be equally distributed "during Ramadan season to Tripoli and Benghazi on the condition that it will only be used for providing humanitarian assistance".

Ramadan begins at the start of August this year.

In the run-up to the Istanbul gathering, Davutoglu expressed hopes that the framework for a political solution to end the conflict could emerge by Ramadan.

Co-chairing the meeting along with the United Arab Emirates, the Turkish foreign minister called for the contact group to focus on these efforts, while keeping up pressure on Muammar Gaddafi's government in Tripoli and looking for fresh ways to support the opposition TNC.

Davutoglu called the TNC the legitimate representative of the Libyan people and said it should lead efforts toward stabilising and reconstructing the country, and plan for the post-conflict recovery.

Given the legal difficulties releasing money frozen by the United Nations, Davutoglu suggested the assets could be used as collateral by governments providing financial aid to the rebel administration in Benghazi.

"Above all, the alleviation of the TNC's urgent need for cash is of primary importance as we approach the holy month of Ramadan," Davutoglu said.

"In this respect I would like to encourage all our partners in the contact group to consider opening credit lines to the TNC amounting to a certain percentage of the Libyan frozen assets in their country," he said.

Reuters