By Missy Ryan
TRIPOLI (Reuters) - Defense Secretary Leon Panetta told Libya Saturday it faced a "long and difficult" road in moving on from 42 years of one-man rule and uniting the fractious rebel groups that overthrew Muammar Gaddafi.
Panetta became the first U.S. defense secretary to visit Libya when he arrived in the capital Tripoli to meet an interim leadership struggling to assert control two months after Gaddafi was captured and killed.
Addressing a joint news conference with Prime Minister Abdurrahim El-Keib, Panetta said Libya faced tough challenges in uniting the forces that toppled Gaddafi, securing arms caches and building an army, police force and democratic institutions.
"This will be a long and difficult transition, but I am confident that you will succeed," he said.
Asked about the militias that wield the real power on Libya's streets, Panetta said: "I'm confident they (the interim leaders) are taking the right steps to reach out to all of these groups and bring them together so they will be part of one Libya and one defense system."
"I have a good sense that they know how to deal with it."
Keib's government won a welcome boost Friday when the U.N. Security Council lifted sanctions on Libya's central bank and a subsidiary, clearing the way for the release of tens of billions of dollars held overseas to ease an acute cash crisis.
The United States said it had unblocked more than $30 billion in Libyan government assets.
The Libyan leadership sorely needs the overseas funds to pay public sector workers, start the long process of rebuilding and to bolster its authority over the militias.
(Writing by Matt Robinson)