By Aziz El Yaakoubi
RABAT (Reuters) - U.N.-brokered talks between Libya's two rival governments hit a setback on Thursday when one of the sides stayed away from the negotiations in Morocco, saying it needed more time for consultations.
An armed alliance known as Libya Dawn took over the capital Tripoli and declared its own government last year, driving out the internationally recognized one and deepening anarchy and division in the oil-producing North African country.
The new round of U.N.-hosted talks in the Moroccan costal town of Skhirat had been expected to initial an agreement on creating a unified government.
But Samir Ghattas, spokesman for the U.N. Support Mission in Libya (UNSMIL), said: "The Tripoli delegation has not attended Thursday meetings."
The Tripoli-based parliament, the General National Congress (GNC), said it was postponing its participation until next week because it needed more time for consultation.
"The draft did not include substantive amendments made by the GNC," its spokesman, Omar Humaidan, said in a televised statement.
Four years after the overthrow of veteran ruler Muammar Gaddafi, Libya is in turmoil, with its oil industry producing less than half its usual output and two armed factions battling for control. Islamist militants have also gained ground.
The U.N. proposal calls for a one-year government of national accord in which a council of ministers headed by a prime minister and two deputies would have executive authority. The House of Representatives - the elected, internationally recognized parliament - would be the legislative body.
It also calls for the creation of a second consultative chamber, the State Council. This would have 120 members, of whom 90 would come from the rival Tripoli parliament, the agreement says.
U.N. special envoy to Libya Bernardino Leon said last week there were still points that were not agreed by the parties, including a court decision challenging the legitimacy of the elected parliament and powers to be given to a second chamber.
Last year, Libya's Supreme Court declared the internationally recognized parliament unconstitutional, a decision rejected by the assembly.
Tripoli-based GNC representatives have expressed concerns about ensuring respect for the court decision, and the U.N. has been trying to reassure them.
The internationally recognized government and the elected House of Representatives also want to review the composition of the State Council to balance it away from handing majority control to the GNC members.
(Reporting By Aziz El Yaakoubi; editing by Patrick Markey and Mark Trevelyan)