DERNA, Libya (Reuters) - With artillery fire rumbling in the distance, residents of Derna gathered in a streetside cafe on Saturday to discuss the future of their city, long a jihadist hotbed in eastern Libya.

Libyan men are seen inside a cafe in Derna, Libya, February 9, 2019. Picture taken February 9, 2019. REUTERS/Esam Omran Al-Fetori

Libya National Army (LNA) soldiers did not declare final victory until the following day over the Islamist militants whose rules had determined life in the city since strongman Muammar Gaddafi was toppled in 2011.

But for owner Saif and his cappucino-drinking customers, the talk was already all about what should happen next with more jobs, above all to keep youngsters out of the militants’ clutches, the top priority for many.

“Seventy percent of residents are unemployed,” he said. “We need an economic program.”

In a city notorious for having sent Islamist militants to Afghanistan and Syria and where citizens were prevented from voting in the 2014 national election, public services have been deteriorating for years.

“We want better state services, health and schools,” said Hafez, who runs a workshop.

Derna has had just one small hospital since 2011 and supplies are limited.

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“We only have 120 beds instead of the 520 in the old hospital,” said its assistant director, Adel Adwal, during a tour of the building. Only one, old X-ray machine is still functioning, but “it can break down any moment,” he said.

Libya’s eastern government, which oppose the internationally recognized administration in Tripoli, has allocated 100 million dinars ($72 million) to restart public services, said city mayor Abdelmoneim Gheithi.

He was appointed by the LNA, which supports the eastern government.

Much of Derna’s old city, where the militants made their last stand and a source said the Red Crescent found 35 bodies, has been reduced to rubble.

In the newer part of the city, which Reuters was able to visit, life appeared to be returning to normal. But appearances were in part deceptive.

Hundreds of families have fled to western Libya, residents say, fearing persecution after being accused of having supported the Islamists.

The United Nations said the humanitarian situation in Derna was of grave concern, with reports of scores of civilians cut off from access to food, water and healthcare.

It was monitoring closely reports of summary executions and had also heard of arbitrary detentions, with 2,000 people said to be held in one prison alone.

The eastern army’s chief of staff, Abdel-Razeq Nathouri, rejected that figure, but said any soldiers who had committed crimes would face trial.

Another resident said the LNA had acted to prevent abuses such as lootings blamed on auxiliary tribal forces but reconciliation would take time as some wanted revenge for having suffered under the Islamists.

“There are some violations going on but state bodies such as criminal police and intelligence have arrived at the old city so hopefully things will calm down,” he said, asking not to be named.