Kadafi Threatens ‘Response in Kind’ to U.S. Sanctions

TRIPOLI, Libya —  Col. Moammar Kadafi said Thursday that his government is considering “a response in kind” to the American imposition of economic sanctions against Libya.

Kadafi said his lawyers are studying the question of sanctions but added, “They deserve a response in kind, not only a Libyan response but an Arab and European response in kind.”

Appearing at his third televised news conference in a week, the Libyan leader read a lengthy statement in which he said his nation will “not falter an inch” in its support of the Palestinian people.

But the Libyan leader maintained repeatedly that his country is “not responsible” for actions carried out by Palestinian guerrillas, such as the Dec. 27 attacks at Rome and Vienna airports that took the lives of 15 travelers, including five Americans.

“If the Palestinian problem is not solved, including the establishment of a Palestinian state, the world must expect further acts of terrorism,” Kadafi warned.

Kadafi was highly critical of President Reagan for imposing the sanctions and expressed satisfaction that Western European governments have so far refused to take similar action against Libya.

On Wednesday, the Reagan Administration announced that it was seizing control of Libyan financial assets in the United States. The move followed an economic embargo against Libya that required American firms to stop doing business with the Kadafi regime by Feb. 1 and all of the estimated 1,500 American workers here to leave the country.

Kadafi said his government had anticipated the Reagan moves by several years and had made contingency plans that would render the sanctions ineffectual.

Expatriates Concerned

Expatriate workers in Libya said they are concerned about the latest Reagan action because the Libyan government used accounts with the Irving Trust Co. in New York to pay all foreign workers, not just Americans.

“This could be a worthless piece of paper now,” said one worker, showing his latest paycheck drawn on Irving Trust.

The Libyan leader, who wore a cranberry-colored shirt and gray leisure suit to the news conference in a pavilion at his official residence, the Bab al Azzizya barracks, appeared to relish his new international stature as the Arab leader who is the target of Reagan’s wrath.

‘Challenge Is Very Useful’

In a moment of introspection about the boiling crisis with the United States, he said: “It’s very possible the American challenge has put extra responsibility on me. Therefore, the challenge is very useful.”

Kadafi said he hopes to form an alliance among Europeans, Africans and Arabs to counter American influence and rid the Mediterranean region of foreign military powers.

The crisis with the United States has in some key respects had an opposite effect from what the Americans intended. Most of the Arab states have said they would support Kadafi in case of armed conflict, and the West European nations, which depend heavily on Libya for trade and oil, have rejected Washington’s request for solidarity in the imposition of trade sanctions.

In an apparent effort to drive a wedge between the Europeans and the United States, the Libyan leader called in Western ambassadors Wednesday night and reassured them that he opposes terrorism. He called for strengthening Interpol, the Paris-based international police agency, and said he supports the extradition of suspected terrorists.

But he apparently had second thoughts about a remark to the diplomats in which he said he believes that Palestinian attacks should be limited to lands occupied by Israel, a position similar to that adopted recently by Yasser Arafat, chairman of the Palestine Liberation Organization, a Kadafi critic.

When asked about the remark Thursday, he replied tartly--and without expanding--that he has revised his thinking on the question.

Much of the press conference was devoted to attacks on Reagan and U.S. policy. He adopted a moderate tone, although he was frequently pushed by correspondents to indicate whether he was contemplating a violent response to the sanctions.

Accusing Reagan of reckless behavior toward Libya and the Arabs, he said “the popular masses have formed suicide groups” to answer the United States in the event of American military attack.

He appeared to be still sensitive about his relationship with Abu Nidal, the Palestinian guerrilla leader accused by Washington and Jerusalem of masterminding the Rome and Vienna airport attacks, as well as other terrorist incidents. When asked about his last meeting with Abu Nidal, Kadafi retorted, “It’s none of your business.”