President Hans-Rudolf Merz and Foreign Minister Micheline Calmy-Rey on Wednesday repeated Switzerland's commitment to complying with the terms of the deal aimed at normalising relations soured by the arrest of Hannibal Gaddafi in Geneva last year.

"The government is willing to restore the once good relations with Libya," Merz and Calmy-Rey said in a statement read out in front of the media.

"Given the currently difficult situation, both sides need to make efforts."

Merz said the government was continuing to demand that Libya allow two Swiss businessmen, held for more than 12 months, to leave the country. Their departure has been blocked as a result of alleged immigration violations.

"The situation for them is unbearable and they are under surveillance," said Merz. The men are in the Swiss embassy in Tripoli awaiting permission to leave Libya.

Two weeks ago Merz travelled to Triploi to sign an accord and to apologise for the arrest of the son of Libyan leader Moammar Gaddafi. Hannibal Gaddafi and his wife were accused of mistreating their domestic staff during a stay in Geneva.

Merz was given assurances by the Libyan prime minister, al-Baghdadi Ali al-Mahmoudi, that the Swiss businessmen would be allowed to return home by September 1. However, to date they have still not received the necessary permission to leave.

Under the accord, both Switzerland and Libya were to appoint their arbitrators for an international tribunal which is due to examine the circumstances surrounding Hannibal's arrest.

Arbitrators

Switzerland named a British lawyer, Elizabeth Wilmshurst, at the weekend in line with a deadline agreed in the bilateral accord.

Libya for its part waited until Wednesday to publish the name of its representative, Saad Jabbar. The British legal expert of Algerian origin has already represented Libya in court over the bombing of an airliner over Lockerbie in 1998.

There was no mention of the appointment of Jabbar at Wednesday's news conference by the Swiss government.

Journalists were not allowed to ask questions after both Merz and Calmy-Rey had read out their statements.

The foreign minister stressed that the cabinet had approved the implementation of the accord with Libya.

"Switzerland has no interest in not complying with a binding accord it has signed. Switzerland, a state under the rule of law, honours its international commitments," Calmy-Rey said.

She also assured Merz of her support in resolving the crisis and ensure the return of the two citizens from Tripoli.

Support for Merz

The statements came amid speculation about further Libyan demands and disagreements in the seven-member Swiss cabinet over Merz's controversial mission to Tripoli.

There are also calls by several parliamentarians for Merz, who is finance minister and holds the largely ceremonial post of Swiss president this year, to step down.

The prestigious Neue Zürcher Zeitung newspaper (NZZ) on Wednesday urged the government to consider other options to deal with the crisis, notably a common stance by the whole cabinet and what it called firm diplomacy.

"The public wants the government put an end quickly to the inappropriate game of cat and mouse in Tripoli."

The editorial calls on Merz to stay in his post because his resignation could be seen as another triumph for the Gaddafi regime and because it might give the wrong signal to the international community that Switzerland is unable to insist on its legitimate positions.

However, the NZZ appears to be somewhat half-hearted in its support for Merz. "President Merz should not step down, at least not now," the paper says.

Urs Geiser, swissinfo.ch