By Maria Golovnina
BENGHAZI, Libya (Reuters) - Oblivious to thunderclouds of flies, Mohamed Ibrahim sifts through heaps of rubbish on the outskirts of the Libyan rebel stronghold of Benghazi in search of anything of value.
"Sometimes I find fire wood. Sometimes I am lucky and it's a piece of copper cable. Anything I can sell," said Ibrahim, a former Gadaffi soldier in his 50s wearing a worn out T-shift emblazoned with "One world one love."
"I know the end of hard life is near. Muammar (Gaddafi) will leave soon. Everything will change. I will get a job and a house for my family."
Like many in the rebel-controlled east, Ibrahim sees Gaddafi's expected overthrow as an immediate solution to many of his problems in a region plagued by unemployment, crumbling social services and infrastructure.
But with the war dragging into a fifth month and Gaddafi showing no signs of giving up, there appears to be no quick fix.
Old Gaddafi-era problems are now compounded by a flurry of new ones, and the cash-strapped rebel leadership in Benghazi -- a sprawling, chaotic city of 700,000 -- is overwhelmed.
Rising food prices and persistent power cuts due to diesel shortages at power plants are slowly chipping away at people's confidence. Schools remain closed, and a sense of uncertainly prevails in a region awash with guns and landmines.
"I've stopped thinking about when it will all end. I only make plans for tomorrow, that's it," said Adel al-Tajouri, a pediatrician at Benghazi's main hospital.
"The hospital does not have enough nurses, many wards are still closed. At home, we have electricity only 40 percent of the time. It's difficult to buy baby food. Prices are up. But people are patient. It has to end at some point."
Streets are strewn with growing heaps of rubbish and the sharp stench of sewage hangs heavily in some areas. Many houses are still gutted and pockmarked with bullet holes from earlier fighting. Construction sites are frozen.
The desert nation has always depended on food imports but the fast depreciating Libyan currency is making them more expensive. The dinar is now trading at around 1.80 to the dollar on the black market, compared to about 1.25 before the war.
Psychologically it is tough for many broken families, with scores of people still missing or gone to the front line. New mass graves are discovered regularly around the east.
Many people are trapped in government-held western parts of the country, unable to rejoin their families in the east.
The rebel leadership in Benghazi -- the city where the revolt against Gaddafi began in February -- is struggling to make ends meet and depends entirely on foreign aid to pay wages and finance costly military operations on several fronts.
It has just about enough to maintain day-to-day operations. Last week, the Mediterranean city was plunged into darkness in a citywide blackout for almost two days just before a last minute $100 million cash injection from Qatar.
Rebel officials say they understand that removing Gaddafi alone would be no quick solution, and years of painstaking work and development would be required to restore normal life.
"I have seen the conditions in Benghazi," said Turkish Foreign Minister Ahmet Davutoglu who visited Benghazi on July 3 to pledge $200 million in aid.
"It needs real reconstruction. Libya is a rich country. Once it has stabilized, it will need no additional money."
Libya was a major OPEC oil exporter before the conflict but now produces virtually no crude because of damage to its installations.
In the rebel east, leaders have struggled to pay wages in the public sector -- a huge problem in a country where a massive chunk of society depends on state salaries, thanks to decades of Gaddafi's centralized rule.
"We are in a war and we expect people to sacrifice," said Mazin Ramadan, a senior rebel finance and oil official. "Obviously ... we are doing what we can."
Many blamed Gaddafi personally for their problems and held no grudge against the rebel council which now rules Libya from the Egyptian border to the city of Ajdabiyah as well as pockets of rebel-held territory in western Libya.
"Some people are angry of course, others are just worried. Life is not easy and things are more difficult now," said Abdul Rahim, 57, who has been jobless since Gaddafi officials confiscated his kiosk several years ago.
"It's a war, people are prepared to wait. I am patient too."
With all planning gone and cities left largely to their own devices, grassroots groups have sprung up almost in all spheres of life to fill the void and bring a semblance of law and order.
Garbage collectors take to the streets daily, teenagers help traffic police direct cars. Vigilante groups patrol neighborhoods and man checkpoints. Volunteers gather children to teach classes in the absence of other forms of education.
Others said they were afraid that Gaddafi's loyalists -- known as "the fifth column" -- could take advantage of the lawlessness should the conflict drag on for much longer.
"Schools are closed, sewage is overflowing, security is lax, the fifth column is everywhere" said Saad Ferhani, a former aircraft engineer. "We will rebuild all of this in the future."
In Benghazi's covered market, lined with arched doorways and crumbling pillars, life appears to have changed little.
Sitting under the elaborately carved wooden ceiling inside his monarchy-era shop selling herbal remedies, Khaled Najar said his family business had lived through many wars and invasions and would survive again.
"I don't know how Gaddafi managed to hold out for so long. Maybe he is using black magic," he said, smiling and wiping jars of herbal oils delicately with a piece of cloth.
"But we can wait for him to disappear for as long as it takes. We waited for 42 years and we can wait a bit more."
(Writing by Maria Golovnina; editing by Philippa Fletcher)