GLOBAL MARKETS-Dollar falls, U.S. stocks end higher after Trump inauguration
* Stocks recover some ground after paring gains on Trump speech
* Rebels blame Gaddafi loyalists for blast in Benghazi
* State TV reports NATO air strikes in Tripoli
* Mountain rebels report fresh shelling of Zintan
* Rebels say Libyan army major defects to Nalut
(Updates with explosions in Tripoli, defection)
By Peter Graff
TRIPOLI, June 2 The Libyan government said on Thursday it will send a representative to the next OPEC meeting, replacing the senior oil official who defected saying he had lost faith in the rule of Muammar Gaddafi.
Shokri Ghanem, who oversaw Libya's oil and gas sector, is the second most senior official to quit and rebels said the defection showed that the end is nearing for Gaddafi almost four months into a rebellion against him.
But a government spokesman in Tripoli played down the significance of Ghanem's departure.
"This is a country, a state, a government, not just one person," Mussa Ibrahim told Reuters.
He said the government would be represented at the meeting of the Organisation of the Petroleum Exporting Countries in Vienna on June 8.
"I don't have a name yet but we'll have somebody," he said.
Ghanem appeared on Wednesday at a news conference in Rome after leaving Libya over a week ago.
"I have been working in Libya for so many years believing that we can make a lot of reform from within. Unfortunately this became not possible, especially now, when we see the spilling of blood every day in Libya," Ghanem said.
More on Libya [nLDE72H00G]
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Libya graphics link.reuters.com/neg68r
Now in its fourth month, the Libyan conflict is deadlocked, with rebels unable to break out of their strongholds and advance towards Tripoli, where Gaddafi appears to be firmly entrenched.
Rebels control the east of Libya around Benghazi, the third-biggest city Misrata, and a mountain range stretching from the town of Zintan, 150 km (95 miles) south of Tripoli, towards the western border with Tunisia.
WEARING DOWN RESISTANCE
Western governments say they believe they are wearing down Gaddafi's ability to control Libya through a combination of diplomatic pressure and military action, although the U.S. role in the conflict in particular has been controversial at home.
The Pentagon on Thursday said approval of a resolution in the U.S. House of Representatives directing President Barack Obama to withdraw from NATO operations against Libya would send an "unhelpful message of disunity" to allies and foes alike.
Gaddafi has signalled he has no intention of stepping down. He says the rebels are armed criminals and al Qaeda militants, and has called the NATO intervention an act of colonial aggression designed to grab Libya's plentiful oil.
A source in the rebel leadership said rebel officials were in contact with top oil companies operating in Libya, but no new contracts were being drawn up over the country's oil operations.
Explosions were heard in central Tripoli on Thursday evening, following on from similar blasts in the early hours, when aircraft could be heard flying overhead.
Al Jazeera also reported that NATO had struck a military base held by troops loyal to Gaddafi in the eastern Libyan city of Brega, an oil port.
Libyan state television reported air strikes in the Al Jufrah district of central Libya on Thursday night.
In rebel-held eastern Libya on Wednesday, an explosion damaged a hotel used by rebels and foreigners in Benghazi, wounding one person.
Abdel Hafiz Ghoga, vice chairman of the rebel National Transitional Council in Benghazi, told Reuters the explosion was believed to have been caused by a hand grenade.
In Misrata, rebels have driven forces loyal to Gaddafi out of the city centre and pushed westwards towards the neighbouring town of Zlitan, where they were exchanging artillery fire.
A doctor at Misrata Hospital said one rebel was killed and nine others wounded on Thursday during fighting in Dafniyah, west of Misrata.
Residents in Zlitan say pro-Gaddafi forces have been moving into the town and mounting a crackdown to prevent Gaddafi opponents from rising up and joining the rebels.
"Gaddafi has tightened security here," a rebel spokesman in Zlitan, who identified himself as Mabrouk, said. "Most residents here support the revolutionaries but they cannot come out for fear of being killed by Gaddafi who brought criminals and provided them with all types of arms including hand grenades."
A Libyan government official earlier said allegations that pro-Gaddafi forces had been enlisting criminals were "completely false", saying nothing of the kind had happened in Zlitan.
In the Western Mountains, rebel spokesman Abdulrahman told Reuters that 20 to 30 Grad rockets exploded in and around Zintan on Thursday evening, fired by Gaddafi troops positioned east of the town.
He also reported battles near Arrayayna, northeast of Zintan, which he said had been going on since the rebels ambushed retreating Gaddafi forces there on Wednesday.
Rebel spokesman Khalefa Ali said a Libyan army major whose unit is deployed in Ghadamis near the Algerian border has defected and joined rebel ranks in Nalut, some 330 km north. The major, who asked not to be named, arrived there on Thursday.
Ali also said rebels in the Western Mountains had taken the city of Yafran, 100 km southwest of Tripoli and an area to the west called Wlad Atya on Thursday.
The rebels left their mountain-top positions on Wednesday to seize a power station in the village of Shakshuk, restoring electricity to the region. Power was briefly lost around midday, but Abdulrahman said it had been restored.
(Additional reporting by Hamid Ould Ahmed in Algiers, Zohra Bensemra in Misrata, Edmund Blair and Isabel Coles in Cairo, Sherine El Madany in Benghazi, and Joseph Nasr in Rabat; writing by Christian Lowe and Jan Harvey; editing by Angus MacSwan)
* Stocks recover some ground after paring gains on Trump speech
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