UPDATE 2-Libyan PM, eastern commander agree national election needed -UN

Libya's internationally recognised prime minister, Serraj al-Fayez, and the military commander of its eastern half, Khalifa Haftar, have met and agreed that national elections are necessary, the United Nations said on Thursday. While both were meeting in Abu Dhabi on Wednesday in their first confirmed encounter since November, Haftar's forces took more land in southern Libya, tilting the power balance towards him at the expense of Serraj's weak Tripoli administration.

The two men agreed "on the need to end the transitional stages in Libya through holding general elections," the U.N. Libya mission (UNSMIL) said in a Tweet. "They also agreed on ways to maintain stability in the country and unify its institutions."

The two last met in Palermo, Sicily, at a Libya conference hosted by Italy. The U.N., supported by Western powers, has sought for almost two years to organise elections as a way of ending eight years of conflict. A proposed date of Dec 10 came and went due to a lack of progress in resolving differences between rival groups.

NO ELECTION DATE Serraj's spokesman confirmed the meeting with Haftar but said no date for elections had been set. There was no immediate comment from Haftar's office.

Serraj heads Libya's internationally recognised government in Tripoli while Haftar is based in the east and allied to a parallel administration. The U.N. gave no further details about the Abu Dhabi meeting. After similar encounters it has engineered it often releases pictures showing hand-shakes between the participants. It made no such picture available on Thursday.

The United Arab Emirates has emerged as a key player in Libya, whose economy and political institutions have been in turmoil since veteran leader Muammar Gaddafi was ousted in 2011. The U.N. Tweet made no mention of an UNSMIL plan for a national conference to decide on the type of elections. Many in the east see such a conference as a waste of time.

Haftar's Libyan National Army (LNA) began its offensive in southern Libya last month, capturing the main city in the region and two oil fields, El Sharara and El Feel. In the past week, the LNA has taken the city of Murzuq, strategically located between the main city of Sabha and the oilfields, after days of fighting, residents said.

They have reached Awinat, near the Algerian border, without meeting resistance, an LNA official said. Awinat is on the road to Ghat, one of the last southern cities still outside LNA control. (Reporting by Ulf Laessing, Ayman al-Warfalli and Maha El Dahan; editing by John Stonestreet and Gareth Jones)