GENEVA (AP) - Libya is refusing to issue visas for visitors from nearly every European country in a bizarre escalation of a dispute that began when Swiss authorities arrested the son of Moammar Gadhafi on suspicion of beating up his servants.
The new restrictions prevent everyone from oil executives to tourists from Europe's passport-free zone of 25 nations from visiting Libya, which has been trying to shed its image as an international pariah and attract investment from Western companies.
Libyan visas already granted are also no longer valid, European governments said, and a number of Italians were waiting in Tripoli's airport for a flight to take them home. Libyan government officials refused to comment.
European officials said the move was clearly retaliation for the 25 nations cooperation with a Swiss travel blacklist of Gadhafi and his son Hannibal and other relatives, along with Libyan government officials.
Hannibal was held in a Swiss jail for two days after his arrest in July 2008 because he and his wife were accused of beating up their servants in a Geneva hotel. Geneva authorities dropped their criminal investigation after the two servants received compensation from an undisclosed source and withdrew their complaint.
Since then, the Swiss government's policy toward Libya has vacillated between capitulation and hardball tactics, with both failing to resolve the dispute.
Moammar Gadhafi forced Swiss Finance Ministerand then-President Hans-Rudolf Merz to apologize in Libya last year and agree to possible compensation claims. Libya pulled most of its money out of Swiss vaults. And Libyan authorities continue to detain two Swiss citizens after 18 months on charges that Amnesty International and the United Nations have criticized as a form of political revenge.
In response, Switzerland suspended a deal aimed to improve bilateral relations, and initiated a visa blacklist that included Gadhafi and his family. That has drawn the rest of Europe into the dispute because a travel ban from one member of the continent's passport-free Schengen agreement is binding on all.
The Schengen visa zone includes France, Germany and Italy as well as non-EU member Switzerland. The Swiss, already isolated by a series of tax spats, are receiving mixed support from their more powerful neighbors, some of whom have extensive interests in Libya's resources-rich economy.
"We don't have problems with Libya, Switzerland does," Italian Foreign Minister Franco Frattini said on Swiss TV. "We are helping Switzerland but it can't take the rest of Europe hostage."
Italy's ENI SpA is one of several companies getting a slice of Libya's 43 billion barrels in crude, the biggest reserves in Africa. ENI has a deal securing its place in Libya until 2047.
"Gadhafi and some ministers have been put on a black Schengen list by Switzerland," Frattini said. "Switzerland thus has set Gadhafi and the ministers on an equal footing with criminals and terrorists."
The EU's executive branch deplored Libya's "unilateral and disproportionate decision."
Cecilia Malmstrom, the European Commission's home affairs chief, said European leaders would discuss the situation later this week and "consider the appropriate reaction."
France, like Italy a major investor in Libya, strongly advised French citizens to avoid traveling or "even making an airport stop" in Libya. Germany, which is involved in a tense standoff with the Swiss over tax evasion, said it regretted that visas already issued in Libya were also no longer valid but placed no blame on either side.
The Libyan visa restrictions don't appear to affect British travelers and businessmen. Britain and Ireland are among the holdouts to Europe's passport cooperation.
For the EU, the options are unclear. It cannot order the Swiss to revoke travel restrictions on Libya, because Switzerland is outside the 27-nation bloc. And issuing separate visa rules in the different Schengen nations would lead to either incoherence or new border controls, making the agreement worthless.
"There are ongoing conversations with the Swiss and Libyan authorities," said Michele Cercone, an EU spokesman. "The commission hopes that a diplomatic solution can be found."