* Rice says Gaddafi exit "may not happen overnight"
* McCain says Gaddafi must go or there will be a stalemate (Adds more background on arms embargo)
By David Morgan
WASHINGTON, March 29 (Reuters) - U.S. Ambassador to the United Nations Susan Rice said on Tuesday that the Obama administration has not ruled out arming Libya's rebels as an option for trying to end Muammar Gaddafi's 41-year rule.
Speaking a day after President Barack Obama defended his Libya strategy in a televised address, Rice said Gaddafi has shown no sign of leaving power without continued pressure from Western powers that have imposed a no-fly zone over Libya and used air strikes to constrain his ground forces.
"Over the long term, as the president said, there are other things that are at our disposal that perhaps will assist in speeding Gaddafi's exit," she told CBS's "The Early Show" as part of a series of TV interviews.
"It may not happen overnight," she added.
She spoke as more than 40 countries and international organizations gathered in London to chart a post-Gaddafi future for Libya. Britain and Italy suggested he could be allowed to go into exile.
Rice said the United States would maintain financial and diplomatic pressure on the Libyan government until Gaddafi leaves and hinted that new steps could be in the offing, including the arming of Libyan rebels.
"We have not made that decision, but we've not certainly ruled that out," she said on ABC's "Good Morning America" program.
The U.N. Security Council imposed an arms embargo on Libya on Feb. 26 but exemptions are possible provided there is approval by the Libya sanctions committee, which consists of all 15 nations on the council.
Portuguese U.N. Ambassador Jose Filipe Moraes Cabral, who chairs the sanctions panel, has voiced doubts about the idea of approving weapons transfers to the rebels. [ID:nN25143996]
Several council diplomats have said that granting a blanket waiver for the rebels would amount to taking sides in a civil war, which Russia, China and other council members would likely oppose. Sanctions committees work on the basis of consensus, so every council member has a de facto veto.
REACHING OUT
Referring to reports that members of Gaddafi's inner circle have begun to reach out to the West, Rice said: "We will be more persuaded by actions rather than prospects or feelers."
"The message for Gaddafi and those closest to him is that history is not on their side. Time is not on their side. The pressure is mounting," she told ABC.
Meanwhile, Republican Senator John McCain criticized Obama's decision to limit the current military operation to protecting civilians and aiding humanitarian efforts, given the U.S. policy goal of ousting Gaddafi.
"If Gaddafi remains in power, you will see a stalemate ... the same kind of thing we saw with Saddam Hussein when we established a no-fly zone, sanctions, etc., and it lasted for 10 years. We've seen that movie before," he said.
McCain is among a handful of Obama critics who have called for arming the Libyan rebels.
The United States is scaling back its military involvement to a supporting role after more than a week of air strikes, allowing NATO to take full command of the international force.
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