As the future of Libya hangs in the balance, the country’s deputy foreign minister claims Islamic extremist members of al Qaeda have reportedly established a permanent jurisdiction in eastern Libya.

According to a report from Al Arabiya, Khaled Khaim confessed to E.U. ambassadors in Tripoli that the terrorist group al-Qaead has set up an “Islamic emirate” in Derna, a city in eastern Libya. The camp, he claims, is headed by Abdelkarim al-Hasadi, a former prisoner once held at the U.S. detention facility in Guantanamo Bay, Cuba.

“They have an FM radio station and have begun to impose the burqa” (head-to-toe covering for women) and have “executed people who refuse to cooperate with them,” Khaim claimed.

Khaim also said Hasadi has a lieutenant, “also a member of al-Qaeda and named Kheirallah Baraassi” in al-Baida.

Derna is the capital of a province by the same name in the region of Cyrenaica, about 775 miles east of Tripoli. Al-Baida lies about 100 kilometers west of Derna.

Residents of Derna reportedly deny the claim, arguing the Libyan government is only trying to “scare Europe.”

But Italian Foreign Minister Francesco Franco Frattini has also claimed that Muammar al-Gaddafi’s regime had lost control of the Cyrenaica area and also suggested than an Islamic emirate had been declared.

Al Arabiya reports:

Speaking at a meeting in Rome organized by the Community of Sant’Egidio, a Christian organisation, Frattini said here had been recent proclamations in Cyrenaica that it was now an Islamic emirate and calls to break with the West.

“It is a worrying development if radical Islam is only a few hundred kilometers away from the European Union’s front door, but nothing can justify the violent death of hundreds of innocent civilians,” he added.

According to recent news accounts, the city of Derna is now under the control of the local population, as opposed to the Gaddafi regime. However, disturbing video has surfaced on the internet that shows troubling developments.  One such video, posted on a Libyan news site, captured the troubling images of Libyan soldiers bound and killed, ostensibly for failing to carry out orders to fire on protesters.

(Warning: the video may be disturbing for some viewers)