By William Maclean, Security Correspondent
LONDON, Jun (Reuters) - Military and diplomatic gains by Libyan rebels have cheered NATO allies desperate for signs of movement in a war creating uncomfortable strains on budgets and in popular opinion.
The successes, which include a battlefield advance, are also set to raise pressure on Muammar Gaddafi as his government organizes for an annual Muslim fasting month that will test its diminished resources to the limit.
But Western hopes for a knockout blow against the veteran ruler remain frustrated, and few officials will say how long they think Gaddafi can hang on given his resourcefulness in a conflict now entering its fourth month.
A notable exception is International Criminal Court (ICC) prosecutor Luis Moreno-Ocampo, who Monday announced an arrest warrant for Gaddafi, his son Saif al-Islam and Libyan intelligence chief Abdullah al-Senussi.
Speaking a day later, he said the Libyan leader would soon capitulate to a NATO-backed revolt.
He added: "I don't think we will have to wait for long ... In two or three months it is game over."
Many analysts said Ocampo's forecast appeared speculative at best. Some say that even if Gaddafi were to go by autumn, unrest would worsen in a power vacuum and a counter-revolt could erupt.
"Game over for him? Possibly in three months time," Graham Cundy, a British military specialist at Diligence, a security and intelligence consultancy, told Reuters.
"Game over for Libya? I think we have got ourselves into a real world of hurt here ... Even if Gaddafi does go and the rebels somehow storm in to Tripoli and establish themselves in government, a whole series of problems then follow."
"When planning for military interventions it is always better to expect the worst and be pleasantly surprised when it doesn't happen. The raising of expectations by either the military planners to their political masters or the politicians to the electorate seldom ends well."
The revolt against Gaddafi's 41-year rule has made only sluggish progress since NATO-led nations started bombing three months ago, but rebels now say they are moving closer to Tripoli.
Rebels based in the Western Mountains region southwest of the capital made their biggest breakthrough in weeks Sunday to reach the town of Bir al-Ghanam, where they are now fighting pro-Gaddafi forces for control.
On the diplomatic front, the ICC warrants have boosted rebel morale, and in recent weeks Gaddafi has begun to lose friends in Africa, where he spent decades building up influence.
Moves by states including Senegal, Mauritania, Liberia, Chad and Gambia to distance themselves from Gaddafi are partly a bet that NATO-backed rebels will finally succeed in ending his rule.
Western officials have seized on evidence that the fighting is moving closer to the capital Tripoli as a sign that the conflict -- at some indeterminate future date -- is in sight.
"The position for Colonel Gaddafi is getting more and more difficult every day," International Development Secretary Andrew Mitchell said in London Tuesday.
WESTERN POLITICAL FORTUNES IN PLAY
In New York, the top U.N. political affairs official, U.N. under secretary-general for political affairs Lynn Pascoe, said the NATO-backed rebels had a tentative upper hand in the fight.
Independent U.S. analyst Geoff Porter said it was not clear how long Gaddafi could hold on for "but he is hanging on a lot longer than observers had anticipated."
The war had reached an indeterminate stage, he told Reuters, and Western leaders were now under pressure to end the war quickly to bolster their own domestic political fortunes.
Shashank Joshi of the Royal United Services Institution, a London think tank, said Ocampo's timetable appeared in keeping with the best information publicly available about the conflict.
He said unconfirmed reports suggested that Gaddafi only had enough refined oil products essential for transportation to last for the next two months and after that ran out "no one is going to be able to move and or do anything."
David Hartwell, north Africa and Middle East analyst at IHS Jane's, a defense and security consultancy, agreed Gaddafi's hold on power was weaker than it was three or four months ago.
But Gaddafi "is probably going to stick around."
POSSIBLE HOSTILE REACTION
"To remove Gaddafi you would need some sort of prefect storm (of defections, NATO attacks, rebel advance, an uprising). As Gaddafi has entrenched, that has becomes more difficult."
Analysts say that while Gaddafi still likely has billions of dollars in cash and gold at his disposal, these resources will be stretched in coming weeks by the twin demands of the war and obtaining sufficient food and fuel to enable Libyans in government-held areas to mark Ramadan.
The fast, when Muslims refrain from eating, drinking or smoking during daylight hours, this year falls during August.
Saad Djebbar, a UK-based former legal adviser to the Libyan government, said Libyans night-time partying, family visits and gift-giving in Ramadan would react with hostility against Gaddafi if the government was unable to provide food and fuel to enable them to participate in festivities.
"By Ramadan, the areas still under the control of Gaddafi will see the worst time ever in Libya's modern history. It will put immense pressure and fuel further exasperate the people's anger against him," he said.
(Additional reporting by Christian Lowe in Algiers, Adrian Croft in London and Louis Charbonneau at the United nations; Editing by Samia Nakhoul)
(Reporting by William Maclean)