TRIPOLI (Reuters) - Libyan authorities have arrested 20 people after an attack on a police vehicle compound in the desert south in which one person was killed, the army chief said on Saturday.

The attack on the compound took place on Thursday in the southern town of Sabha, some 800 km (500 miles) south of the capital Tripoli.

"They arrived by car, armed with guns and starting shooting. They stole some cars and escaped," Yusef al-Mangoush, army chief of staff, told Reuters.

"One person died from injuries sustained in the attack. Those arrested have been transferred to Tripoli. We cannot say who they are yet as the investigation is still ongoing," he said, adding the stolen cars had been retrieved.

In the chaos since the fall of Muammar Gaddafi in 2011, Libya's vast desert south has become a smuggling route for weapons which have reached al Qaeda militants deeper in the Sahara.

Libya's national congress declared the south a military zone in December and ordered the temporary closure of borders with Algeria, Niger, Chad and Sudan.

Earlier on Saturday, Prime Minister Ali Zeidan met Mangoush, members of the ruling national congress and other officials to discuss improving security in the region.

"There are plans for developing the area - with better military and police," Zeidan told reporters.

Last month, two Libyan military officers were killed and three soldiers injured when unknown assailants forced their way into a military camp near Sabha.

(Reporting by Ali Shuaib; Writing by Marie-Louise Gumuchian; Editing by Jason Webb)