...Gaddafi said he sees a bright future in relations with Washington, once his avowed enemy. "We are optimistic," he said, speaking at a government compound outside Sirte, his home town on the Mediterranean coast. "The problem was, we have not had a chance for dialogue. Now we can talk."

As for opposition from Muslim political groups, Gaddafi dismissed the role of Islam in politics. "We don't want to involve God in questions of infrastructure and sewerage, technology and water. Islam equals God. How can we involve it in such daily affairs?"

Gaddafi began his years in power citing Islam as a pillar of his rule, but later he tacked on pan-Arab revolution, socialism and anti-colonialism as the official state ideology. The mixture upset Islamic traditionalists, and Libya has suffered periodic unrest largely attributed to Muslim opposition groups. In the late 1990s, Gaddafi survived at least two assassination attempts, one blamed on a shadowy organization called the Islamic Martyrs Movement. The Muslim Brotherhood, a longtime, sometimes-violent pan-Arab organization, also operates in Libya, foreign observers in Tripoli say.

"Islam is the main alternative here, as it is all over the Arab world," said one diplomat. "Gaddafi has decided to play the Western card to fight it."

Until the late 1990s, retail stores were forbidden in Libya, and industry, including oil production, was in the hands of the government. Now, Gaddafi has allowed private businesses to open and plans to privatize industries other than oil. Libya also hopes to attract foreign investment into light industry and to modernize oil fields, which provide 95 percent of the country's export earnings. Libya also wants to increase its OPEC production quota. "This is a kind of Chinese-style liberalization. Like the Communist Party in China, Gaddafi wants to harness the globalized economy to stay in power," said the diplomat...

...In contrast to the rapid disarmament, there is no evidence that Gaddafi is preparing to relax his one-man rule. The country is nominally run by what are called people's committees, found in factories, farms, schools and government agencies. Gaddafi says his leadership is based on being the author of the 1969 revolution that unseated Libya's monarchy. The system is enshrined in "The Green Book," Gaddafi's ruling manifesto, which shuns parliaments, political parties and even salaries, which he called a form of slavery. "The Green Book" also preaches the equality of women, although it frequently refers to them as feeble.

A reporter asked Gaddafi whether "The Green Book" was out of date. He said no. "I consider it the guide for all humanity. One day, the whole world will be a republic of the masses, topple down all governments and parliaments."...