The United States and European powers pressed Libya’s rival factions to set an "unconditional" ceasefire at talks restarting on Monday in Algiers on forming a unity government.

The United States and European powers pressed Libya's rival factions to set an "unconditional" ceasefire at talks restarting on Monday in Algiers on forming a unity government, as two attacks on foreign embassies were linked to extremist militants.

A bomb exploded outside the Moroccan embassy in Tripoli, causing no casualties but damaging nearby cars, a security official. Like many others in the Libyan capital, the embassy is currently inactive.

Morocco is hosting a UN-backed dialogue between representatives of the two rival governments controlling the country, separate to talks that were to resume Monday in Algeria.

The bombing came hours after gunmen opened fire on South Korea's embassy compound from a passing car on Sunday, killing two Libyan guards and wounding a third person.

"We strongly urge all participants to the dialogue to negotiate in good faith and use this opportunity to finalize agreements on the formation of a national unity government," said a statement issued by the foreign ministers of France, Germany, Italy, Spain, Britain and the United States.

"Only through compromise can Libya move toward a more secure, stable, and prosperous future," they said.

The 28-nation EU fears Libya could become a direct security threat while more and more refugees seeking safety in Europe present a major humanitarian problem.

Libya has been plagued by chaos since the end of the 2011 revolt that toppled Moammar Gaddafi, with heavily armed militias battling for control of its cities and oil wealth, and rival governments and parliaments vying for power.

The country has had two governments and parliaments since Tripoli was seized in August by the Islamist-backed Fajr Libya militia and the internationally recognized government fled to the country's far east.