UN envoy Bernardino Leon's fourth version of a proposed pact between the Fajr Libya Islamist militia-led alliance and Libya's internationally recognised government contained "positive proposals that could lead to a political solution", the Tripoli administration said in a statement.
However, it added that "modifications" needed to be made before it would sign a final version of the deal.
The UN has tried for months to broker a compromise between warring factions in Libya, which descended into lawlessness after the NATO-backed overthrow of veteran autocrat Moamer Kadhafi in 2011.
The conflict has also prompted a huge rise in the number of migrants trying to make the dangerous Mediterranean crossing to Europe, with hundreds dying in shipwrecks and the EU straining to respond.
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Under the proposed deal, both sides would commit to integrating their militias into a reformed military under direct control of a unity government.
But the recognised government, exiled in Libya's east, voiced its "displeasure" yesterday with the text drawn up by Leon, who had hoped to get an interim deal in place in time for the start of the holy Muslim month of Ramadan this week.
"We will express ourselves after carefully examining the proposition," said former prime minister Mahmoud Jibril.