G7 to warring Libyan sides: Time to take bold political decisions

G7 leaders urged Libya's warring factions to take "bold political decisions" at UN peace talks Monday, as fears grew that the oil producer is on the verge of collapsing into a failed state.

"The timing for fighting has passed, the moment for bold political decisions has come," the leaders of the world's most industrialised nations said in a closing communique after a summit in Germany.

"Libyan leaders must now grasp the opportunity to conclude these negotiations and form a Government of National Accord accountable to the Libyan people," the G7 added as the rival sides met for a new round of peace talks in Morocco on Monday.