WASHINGTON — The Reagan Administration, stepping up its campaign against Moammar Kadafi, today urged the Libyan people to consider the country's isolation and faltering economy and decide whether they want him to remain in power.
While not calling directly for his overthrow, the State Department said, "It's clear that the Libyan economy has been mismanaged and that Libyan actions have increasingly isolated the Libyan people from the international community."
Spokesman Charles E. Redman, after reading the prepared statement, said, "It's up to the Libyan people to decide" Kadafi's future.
The statement followed a report in the Wall Street Journal that the Central Intelligence Agency has intensified its covert efforts to unseat Kadafi.
Support for Enemies
The United States bombed Tripoli and Benghazi, the two principal Libyan cities, in mid-April in what was described by the Administration as retaliation for state-sponsored terrorism against Americans.
The newspaper said that under a plan approved last month by President Reagan, the CIA is increasing support to Kadafi's internal enemies and trying to unify some of the Libyan opposition groups.
Redman said he could not comment on "alleged intelligence activities." But he went on to say, "We reserve the right to respond to any act of state-sponsored terrorism against the United States in a manner we deem most appropriate."
Kadafi was in Harare, Zimbabwe, today for the 25th anniversary summit of Nonaligned Movement and was reported by official Libya radio as saying he wants to scrap the movement and divide the world in two: those with the industrialized West and those against it.
Official Libya radio quoted Kadafi as saying: "As for the nonaligned conference, I will do my best to surmount this movement and to abolish it completely.
"I will also do my best to divide this world into two camps only--the liberation camp and the imperialist camp, as in actual fact there is nothing else in the world but these two camps."
In a translation given by Libyan officials to airport reporters, however, there was no reference to abolishing the movement. He was quoted as saying only: "I shall do my best to surpass the movement and divide the world into two camps. . . . "