Libya took a major step towards democracy this year by holding its first free elections but success has been marred by rising extremism, failure to disband militias and delays in forming state institutions. And facing tribal conflicts, threats from former regime backers and high social demands, the new authorities seem not sure where to turn next, one year after deposed dictator Moamer Kadhafi was captured and killed in his home town. \"Libya passed the first test of democracy by electing a national assembly after more than 42 years of totalitarianism,\" said Libyan analyst Nasser al-Daessy, referring to the General National Congress elected in July. \"But the political situation is still shaky in Libya and we must urgently reach a political consensus to rebuild the institutions of the state.\" Overwhelmed by sporadic outbreaks of clashes and militant attacks, which last month claimed the life of a US ambassador, the interim authorities have been hard pressed to rebuild the country after it was ravaged by eight months of conflict. And they are not lacking in means.The oil sector wasted no time in getting back on its feet with production almost reaching pre-conflict levels of 1.6 million bpd. The North African nation boasted a 2012 budget of $56 billion, the highest in its history. But Kadhafi has left behind a grim legacy: a country without institutions as well as a weak army and police force, which have been eclipsed by militias that looted weapons depots during the war. Kadhafi\'s diehard supporters remain a threat, with Tripoli periodically accusing remnants of the former regime of trying to spread chaos and derail the democratic process. A security source told AFP that \"precautions\" were being taken to prevent any attack by pro-Kadhafi elements hoping to mark the one-year anniversary of his death, which falls on Saturday. No ceremonies are planned that day in Libya, which will celebrate instead the first anniversary since the declaration of \"liberation\" that was announced on October 23, 2011 -- three days after Kadhafi was killed in Sirte.Former rebels, who were once hailed as heroes and in some cases joined nascent law enforcement organs in the aftermath of the 2011 conflict, are now facing a backlash from a population angry over the unchecked power of armed groups. Citizens want to see security in the hands of a professional army and police. Spurred by massive anti-militia protests in Benghazi last month, in which some hardline Islamist groups were forcibly evicted from their bases by angry residents, Tripoli has cracked down on armed groups holed up in strategic facilities. Mohammed Megaryef, president of the assembly, stressed the need for greater security in an address on Monday to military officers. \"You need to form an army in order to build a state... A strong professional army is vital to guarantee security and protect the sovereignty of the state,\" he told them. Meanwhile, human rights remain a source of concern with watchdog organisations warning against the entrenchment of militias which continue to arrest and torture with impunity, some of them emboldened by the state\'s recognition. And the surprise arrest of an International Criminal Court delegation visiting Kadhafi\'s son Seif al-Islam in Zintan, where he has been held by an ex-rebel brigade since his capture in November, raised serious concerns about justice. Tripoli, however, bent on holding local trials for key figures of the former regime including Seif, scored big points at home by obtaining the extradition of former spy chief Abdullah Senussi and ex-prime minister Al-Baghdadi al-Mahmudi.In Benghazi, senior military and police officers, along with judges who served under the former regime, have been targeted in a wave of attacks that are blamed on hardline Islamists previously held in Kadhafi\'s jails. Extremists became an ever greater source of concern in the wake of the September 11 attack on the US consulate in Benghazi that killed four Americans, including US Ambassador Chris Stevens. Justice may prove elusive considering that the new government has not moved to charge Libyans over attacks on international targets carried out during the Kadhafi era. The authorities have also failed to investigate the killing of Kadhafi and his son Motassim as they had pledged. Prime Minister elect Ali Zeidan, who was elected this week by the national assembly, faces no easy task forming a government capable of tackling security and winning the confidence of rival political and regional factions. He has made national reconciliation a top priority at a time when mounting tensions between the cities of Misrata and Bani Walid, which fought on opposite camps of the 2011 conflict, risk plunging the country into civil war. The new assembly, which is still learning the ropes of democracy, has been so busy putting out fires since it came into power that it has neglected its chief task of drafting a constitution to govern future elections.