Diplomats from 29 countries are attending a meeting of the Libyan Contact Group, a coalition of Arab and European governments as well as the United States and Turkey, in Istanbul Thursday. Representatives from NATO, the African Union, United Nations, European Union, Arab League, Gulf Cooperation Council and Libya's National Transitional Council -- the rebel Libyan government -- are also present. "Today we are all proud and pleased with the ground-breaking developments on the ground" in Libya, said Turkish Foreign Minister Ahmet Davutoglu as he opened the meeting. "The military victories of the National Transitional Council against the Gadhafi forces in Tripoli have brought the Libyan people closer to the noble cause that they been fighting for -- freedom, justice, dignity and democracy." Turkey is one of the co-chairs of the Libya Contact Group. The governments of many of the countries in attendance threw their weight behind the Libyan rebels by freezing the assets of Moammar Gadhafi's government and pledging military and financial support to the NTC, based in Benghazi. The NTC is represented in Istanbul Thursday by its ambassador to the UAE, Arif Ali Mayed, while Washington is represented by Deputy Secretary of State William Burns and Jeffrey Feltman, assistant secretary of state for Near Eastern Affairs. There is significant Arab representation at the session, with diplomats from Bahrain, Jordan, Morocco, Lebanon, the UAE, Qatar and Kuwait. Egypt is listed as an observer. "The group will discuss next steps to be taken at the political level," Turkish Foreign Ministry spokesman Selcuk Unal told CNN in a telephone interview before the session. "It will be no surprise if they also discuss the financial aspect of the crisis," he added. The cash-strapped rebel leadership has been lobbying the United Nations and several countries to release Libyan money frozen in foreign banks by the U.N. Security Council. Speaking in Rome Thursday after a meeting with senior NTC member Mahmoud Jibril, Italy's Prime Minister Silvio Berlusconi pledged to help the NTC. Italy will unfreeze about $505 million (350 million euros) in Libyan assets that have been held in Italian banks, Berlusconi said. He also promised money to support Libya's health and education infrastructure and for military training. Jibril said that the battle for Tripoli was still going on, but that Libya must think of its future. He said urgent aid was needed to deal with the situation, adding that some people had not received a paycheck for months. If the NTC was not able to provide basic services and pay salaries, there was a risk that it would fail and the country would be destabilized, he warned. A U.S. proposal for the U.N. Security Council to hand more than $1 billion in frozen Libyan government assets to the NTC is opposed by South Africa. The Security Council met on the matter Wednesday. Turkish officials confirmed that South Africa, which has long had close political ties with Gadhafi, is not a member of the Contact Group.