The government has called on Libya to honour pledges made in an accord with Switzerland and allow two detained Swiss nationals to leave the country.
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 awaiting permission to leave Libya.
Two weeks ago Merz travelled to Tripoli 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.
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 Djebbar. The British legal expert of Algerian origin has already advised Libya over the bombing of an airliner over Lockerbie in 1998.
There was no mention of the appointment of Djebbar 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 ensuring the return of the two Swiss citizens from Tripoli.
Her ministry has been asked to take over the dossier from Merz.
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 to 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," comments the paper which is said to be close to Merz's political party.
Urs Geiser, swissinfo.ch
In a previous diplomatic spat in 1997 Tripoli banned Swiss citizens from entering Libya to protest against Switzerland's refusal to grant a student visa to a son of Colonel Gaddafi.
In return the Swiss authorities tightened entry regulations for Libyan citizens. The conflict was solved in April 1998.
Political contacts between the two countries returned to normal after the UN-imposed sanctions were lifted in 2003.
Libya is one of Switzerland's five key export markets on the African continent and was its main supplier of crude oil before economic relations were interrupted.
Libya provided about 50% of Swiss crude oil imports and had assets worthSFr6.5 billion in Swiss banks in 2007.
Swiss exports in 2007, mainly in the watchmaking and machinery as well as the pharmaceutical industries, rose 16.3% to SFr278.6 million.
July 15, 2008: Hannibal Gaddafi and his wife Aline are arrested at a Geneva hotel after police receive reports that they have mistreated two servants.
After two nights in detention, the couple are charged with inflicting physical injuries against the servants. The Gaddafis are released on bail and leave Switzerland.
July: Two Swiss nationals are arrested in Libya. Swiss businesses are forced to close their offices and the number of Swiss flights to Tripoli is cut.
July: Bern forms a task force and sends a delegation to Libya. Two Swiss nationals arrested in Libya are released from jail.
January 2009: Talks are held in Davos with Seif al-Islam Gaddafi, one of the Libyan ruler's sons. A diplomatic delegation travels to Tripoli.
April: Hannibal and his wife, along with the Libyan state, file a civil lawsuit against the Geneva authorities in a Geneva court.
May: Foreign Minister Micheline Calmy-Rey visits Libya, reporting "significant progress".
June: Libya withdraws most of its assets from Swiss bank accounts.
August: Merz, who meets the Libyan prime minister but not Gaddafi, apologises in Tripoli for the arrest. Swiss appoint arbitator for international tribunal.
September: Libya does not let the two Swiss nationals leave the country, breaking the promise it made to Merz that they would be free to return to Switzerland before September 1. Libya names its representative for the tribunal.