Libya's unity government recaptured a strategic crossroads from the Islamic State group Tuesday and called for warplanes to bomb the jihadists after world powers showed readiness to arm it.

On Monday, the United States, Italy and Libya's allies and neighbours agreed in Vienna to arm the UN-backed Government of National Accord (GNA) to confront the threat from IS.

The agreement comes as rival Libyan forces prepare separate offensives against IS, which has taken advantage of the chaos since its 2011 revolution to establish a new stronghold across the Mediterranean from Europe.

The GNA forces said on Facebook that they recaptured Abu Grein crossroads south of Libya's third city Misrata, where the coastal highway meets the main road south into the desert interior.

They also said they had made major advances in the latest battles, reaching an area only 50 kilometres (30 miles) west of the IS stronghold of Sirte.

Tuesday's clashes claimed the lives of seven members of the GNA forces and left 15 wounded.

IS overran Abu Grein on May 5 as part of a series of forays into territory controlled by the UN-backed government, including a deadly attack a week later on a checkpoint at Saddada, 50 kilometres to the west.

The loss of Abu Grein had prompted militia in Libya's third city to mobilise.

Its recapture came a day after US Secretary of State John Kerry said a 25-member group agreed to exempt the GNA from parts of the UN arms embargo imposed since the uprising against Moamer Kadhafi's regime five years ago.

International backing for an exemption to the embargo is "fundamental to the creation of a strong army... capable of fighting the jihadist Islamic State group and other extremist groups", GNA deputy head Mussa al-Kony told AFP.

"State institutions have collapsed because the army itself fell apart. Our priority today is to unify this institution and revive it, but without weapons we cannot do this," Kony said.

"What we want is to acquire all sorts of weaponry... but our priority is aircraft," he said. "We want pilots, helicopters and warplanes."

- 'New front for militias' -

On Monday in Vienna, GNA chief Fayez al-Sarraj requested both equipment and training which the international ministers present were ready to support.

World powers, Kerry said, will support the GNA's exemption "from the UN arms embargo to acquire those weapons and bullets needed to fight Daesh (IS) and other terrorist groups".

Sarraj has sought for the past month and a half to assert the GNA's authority in Tripoli.

It comes as IS seeks to expand westwards out of Sirte, Kadhafi's hometown on the Mediterranean coast which it has controlled since last June.

Europe fears the jihadists could use Sirte's port and airport as a springboard to attack the continent.

The international community, particularly European powers, are also concerned about a stream of refugees and migrants crossing the Mediterranean from Libya's unsecured coast.

However, France on Tuesday urged caution over supplying arms to the unity government, warning against weapons falling into the wrong hands.

"As was decided... in Vienna, it is essential to help the national unity government to control and ensure the security of Libyan territory," the French foreign ministry said.

"The arms embargo must be maintained," it said, although the GNA "can legitimately request exemptions".

Libya was left with two rival administrations after a militia alliance took over Tripoli in mid-2014, setting up its own authority and forcing the elected parliament to flee to Tobruk in the country's far east.

The Tripoli-based unity government, formed under a December power-sharing deal agreed by some lawmakers from both sides, has announced the formation of a new military command to take charge of the battle against IS.

But armed forces loyal to the other government based in the far east are also preparing to battle IS under the command of General Khalifa Haftar.

Ahmed al-Mesmari, a spokesman for Haftar's forces, said the decision to ease the arms embargo for the benefit of the GNA only was "illegal", adding that the forces of the unity government are "a new front for militias".

He said the decision will "create chaos, and we will turn to countries that support the army in order to arm ourselves".

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