Global and regional powers are prepared to supply Libya's fragile unity government with arms by making exemptions from a UN arms embargo, foreign ministers meeting for diplomatic talks in Vienna said on Monday in a joint statement.

"We will fully support these efforts while continuing to reinforce the UN arms embargo," the powers' chief diplomats said, acknowledging the unity government's request for exemptions to the embargo.

Top diplomats from 21 countries were meeting to discuss ways to strengthen Libya's UN-backed government and stabilize the country, which has become a hub for Islamic State extremists and people smugglers.

"Ensuring security and defending the country from terrorism must be the task of unified and strengthened national security forces," foreign ministers of UN veto powers as well as North African, Arab, and European countries said.

The power vacuum created by Libya's two rival administrations since mid-2014, each backed by competing militias, and the chaos following the toppling of dictator Moamer Gaddafi in 2011 has enabled the Islamic State militia to establish a foothold in the North African oil-producing country.

The question was whether terrorism, criminal smuggling and instability would further expand in the North African country near Europe, or whether the new government would be able to win back stability and a sense of national unity, German Foreign Minister Frank-Walter Steinmeier said.

"At this moment, this is still an open question," he told reporters shortly before the meeting began.

Security issues topped the agenda at the talks hosted by US Secretary of State John Kerry and Italian Foreign Minister Paolo Gentiloni.

"Libya is a keystone for access to the Sahel, the Maghreb, the Near East, the Mediterranean, and Europe. And to have Daesh get a foothold in Libya is bad for everybody," a senior US State Department official told reporters ahead of the talks, using an Arabic name for Islamic State.

"We're expecting that the [meeting] will show the international community lining up unambiguously behind the government of national accord as the recipient of security assistance in Libya," the official said.

In March, a national unity government formed under a UN-sponsored peace deal revived international hopes that it will be able to re-establish stability and stop Islamic State's expansion.

Based in Tripoli, it has limited influence elsewhere in the country, and it has yet to win a vote of confidence by the elected parliament based in Tobruk.

However, Steinmeier noted that the government had recently won the backing of Libya's central bank and had won control of the vital Oil Ministry.

Some Western countries have been mulling airstrikes against Islamic State in Libya, but UN Libya envoy Martin Kobler has warned that such operations would be premature if there is no effective Libyan army that can take control of bombed cities.

European countries are keen to see a stable Libya because they want to stop the lawlessness that has turned the country into a major hub for migrants seeking to go to Europe.

Kobler estimates that at least 100,000 people could cross the Mediterranean from Libya to southern Europe this year.

The officials will also hold crisis talks on Syria on Tuesday, and are expected to broker talks between Armenia and Azerbaijan after the recent flare-up of violence between the two countries.

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