* Sarkozy says military operations will continue if a need
* "Friends of Libya" meeting set for Sept. 1
* France, partners eye resolution to end sanctions (Rewrites throughout, adds quotes, detail)
By John Irish
PARIS, Aug 24 (Reuters) - French President Nicolas Sarkozy said France would persevere with military operations in Libya for as long as needed by the rebel forces which have pushed Muammar Gaddafi out of his stronghold in Tripoli.
Sarkozy, the first Western leader to recognize the rebels as Libya's legitimate government, invited world leaders to meet in Paris on Sept. 1 to discuss Libya's reconstruction.
"We are ready to continue military operations under the U.N. Resolution of 1973 for as long as our Libyan friends need," Sarkozy told a news conference flanked by Mahmoud Jibril, a leader of the Libyan National Transitional Council (NTC).
Pressed for a timeframe, Sarkozy said French commitment would remain until Gaddafi's army "no longer presents a threat to the Libyan population."
France, along with other NATO allies, has provided warplanes that have attacked Gaddafi troops and armour.
Earlier on Wednesday, a French diplomatic source said France and its U.N. partners Britain and the United States were working on a draft United Nations resolution to unfreeze Libyan assets and unlock sanctions.
That preliminary plan will be worked out in the coming days during talks in Qatar, Turkey and New York, the source said.
A French foreign ministry spokesman said it was crucial for the NTC to control the financial resources of oil-producing Libya, which has been hit by successive U.N. sanctions since Gaddafi's crackdown on civilian protesters earlier this year.
Sarkozy said his "Friends of Libya" conference would extend to Russia, China, India and Brazil --- all countries that have expressed concern over the NATO-led air campaign begun in March.
FIGHT TO THE DEATH
Sept. 1 is a significant date for Libyans, as it marks the coup d'etat that brought Gaddafi, then a young army general, to power in 1969.
Gaddafi vowed on Wednesday to fight to the death or victory after he was forced to abandon his Tripoli headquarters as loyalists continued to battle rebels in the capital.
Jibril said he had no information on Gaddafi's whereabouts, but said pockets of resistance loyal to the veteran leader still remained in Tripoli and in the south of the country. There has been speculation that Gaddafi may be in his home town of Sirte, about 450 km east of Tripoli on the coast.
Among the NTC's biggest concerns is that the United States and others will be too slow to unfreeze billions of dollars of Gaddafi's assets, leaving the new government seeking legitimacy under tight budget constraints.
The U.S. State Department said on Tuesday it was seeking to release between ${esc.dollar}1 billion and ${esc.dollar}1.5 billion of frozen Libyan government assets to the rebels within days if it can secure the blessing of the United Nations sanctions committee.
France has released about 260 million euros blocked in its Societe Generale bank belonging to a Libyan fund.
"It (unfreezing assets) is essential. We are working on this," Mansour Saif al-Nasr, the rebels' envoy in Paris told Reuters. "All these meetings will have this on their agenda."
Sarkozy first suggested in May holding a conference that would gather the international community -- including countries that had opposed intervention in the North African oil producer, and those who had rejected Gaddafi's government.
The centre-right president took a gamble a year before a 2012 presidential election by spearheading the West's military interventio n even as critics at home called France overextended after an intervention in Ivory Coast's bloody civil war.
With Gaddafi's overthrow now well under way, France is keen to keep up the diplomatic initiative it has taken with the Libyan crisis following its hesitant reactions to uprisings in Tunisia and Egypt.
Jibril heads the NTC's executive committee and is referred to as Libya's prime minister. (Additional reporting by Daniel Flynn; Writing by Alexandria Sage, Editing by Catherine Bremer and Matthew Jones)
Our Standards: The Thomson Reuters Trust Principles.
