WASHINGTON—The Obama administration and Libyan rebels are wrestling for control of $34 billion the Treasury Department seized from the financial holdings of Col. Moammar Gadhafi.

The Transitional National Council of Libya, the rebels' executive body, has raised pressure on senior White House and Treasury officials in recent weeks to make available at least some money to help address shortages of food and medicine caused by the military conflict with Col. Gadhafi's forces.

U.S. officials, though, say the funds, if not properly monitored, could wind up with Islamist elements hostile to the U.S., including al Qaeda.

As the tussle played out, the Treasury sanctioned five additional Libyan government officials on Friday, including the prime minister, oil minister, and head of Libya's Internal Security Office. The U.S. also froze assets in the U.S. held by two of the Gadhafi family's international charities.

On Thursday, the rebel council sent Treasury Secretary Timothy Geithner a letter detailing measures it said could allow for the quick disbursement—and thorough monitoring—of some of the money.