WASHINGTON -- The Obama administration stands ready to offer "any type of assistance" to Libyans seeking to oust Moammar Gadhafi, Secretary of State Hillary Clinton said Sunday, adding a warning to other African nations not to let mercenaries go to the aid of the longtime dictator.




The White House had no immediate comment on their recommendations.

Meanwhile in Zawiya, Libya , residents shouting "Free, free Libya," anti-government rebels who control this battle-scarred city nearest to the capital deployed tanks and anti-aircraft weapons Sunday to brace for an attack by troops loyal to Moammar Gadhafi.

Politicians in the opposition stronghold of Benghazi set up their first leadership council to manage day-to-day affairs, taking a step toward forming what could be an alternative to Gadhafi's regime.

In the capital Tripoli, where Gadhafi is still firmly in control, state banks began handing out the equivalent of $400 per family in a bid to shore up public loyalty.

"The Libyan people are fully behind me," Gadhafi defiantly told Serbian TV, even as about half of the country was turning against him and world leaders moved to isolate him. "A small group (of rebels) is surrounded ... and it will be dealt with."