TRIPOLI, May 17 (Reuters) - Clashes rocked Libya's capital early on Tuesday as the parliament-appointed prime minister, Fathi Bashagha, tried to take over government there but was forced back out by a rival administration that refuses to cede power.

Bashagha entered Tripoli overnight after two months of stalemate between Libya's rival administrations, but withdrew hours later as fighting broke out.

The crisis risks plunging Libya back into prolonged fighting after two years of comparative peace, or returning it to partition between the eastern-backed government of Bashagha and a Tripoli administration under Abdulhamid al-Dbeibah.

Political deadlock has already led to a partial blockade of Libya's oil facilities, cutting its main source of foreign revenue by half.

Diplomacy to resolve the crisis or lay the ground for new elections is making slow progress.

Speaking from the central coastal city of Sirte, where the parliament last week said he should base his government while unable to work in Tripoli, Bashagha said he would not use violence to take over in the capital.

He said he had entered Tripoli without an armed şişli escort but had been attacked by fighters allied to Dbeibah.

Dbeibah accused Bashagha of entering Tripoli with fighters as "an outlawed armed group trying to sneak into the capital under darkness."

The sound of heavy weapons and automatic gunfire reverberated across Tripoli on Tuesday morning. Schools were canceled and the normally heavy rush hour traffic was sparse, but the clashes stopped after Bashagha's withdrawal.

"I don't think things will just return to being cool and static and relaxed," said Libya expert Jalel Harchaoui, adding that Dbeibah would likely try to put more pressure on the factions in Tripoli allied to Bashagha.

However, wider conflict seemed unlikely, he said, given Bashagha's rapid withdrawal from Tripoli.

With neither side apparently able to establish a decisive military advantage across the country, Libya seems set for a longer period of deadlock, with Dbeibah firmly entrenched in Tripoli and his foes unable to take it.

That may prolong the shutdown of major oil facilities by forces in eastern Libya tied to commander Khalifa Haftar, who backs Bashagha.

In Washington, a U.S.

State Department spokesperson said the department was highly concerned about violence and urged all armed groups to refrain from violence.

DEADLOCK

Libya has had little security since the 2011 NATO-backed uprising that ousted Muammar Gaddafi and its split in 2014 between rival eastern and western factions before a 2020 truce that brought it under Dbeibah's fragile unity government.

A plan for an election in December collapsed amid arguments among major factions and prominent candidates over the rules.

In addition the parliament, which had sided with the east during the war, moved to appoint a new administration.

The unity government's prime minister Dbeibah rejected the parliament's moves, saying his administration was still valid and he would only hand over power after an election.

Bashagha, a former interior minister who like Dbeibah comes from the powerful coastal city of Misrata, has repeatedly said he would enter Tripoli without violence.

His previous attempts to do so ended with his convoy blocked by rival factions.

Last week, the parliament said Bashagha's government could work for now from Sirte, a central city near the frozen front line between eastern and western factions.

Diplomacy has focused on talks between the parliament and a Tripoli-based legislative body to lay the ground for another attempt to settle Libya's conflict by holding an election. (Reporting by Ahmed Elumami and Ayman al-Sahely in Tripoli; Ayman al-Warfali in Benghazi, Hani Amara in Istanbul; Enas Alashray and Lilian Wagdy in Cairo; Writing by Angus McDowall in Tripoli; Editing by Nick Macfie, Alison Williams and Grant McCool)