Interim government forces fled in chaos from the town of Bani Walid and pulled back from Sirte after yet more failed attempts to storm Gaddafi's final bastions and take control of the entire country.
The political and military problems underscored how hard it would be to restore stability to Libya after Gaddafi was driven out of Tripoli last month.
The former rebels' executive committee, or cabinet, was dissolved last month. A new committee, to include officials responsible for defense and interior affairs, was supposed to be appointed by interim Prime Minister Mahmoud Jibril on Sunday.
But the talks broke down when his proposals did not receive full backing from all current members.
"We had an advisory meeting with the NTC in order to form a new cabinet. We have agreed on a number of portfolios. We still have more portfolios to be discussed," Jibril told reporters through a translator at a news conference on Sunday.
A list of the approved ministries was not available, though sources familiar with the negotiations said that the position of Jibril himself was a sticking point during the talks.
There was also disagreement about whether it is necessary to form a transitional government before the declaration of "liberation" - a concept that appears to include the capture of Gaddafi and the defeat of his loyalists who still hold three key towns. Read More