Can a .ly domain rank on Google.com? Sure. Here are many that do:
https://www.google.com/search?q=site%3Aly
Do they have a ranking disadvantage? That's a lot tougher question. It's definitely in a gray area. Thanks to Bit.ly and some others, there is some precedent for these domains to be treated as generic, if other signals suggest they are not Libyan domains (geo-location, language, etc.), but there's always more risk for a new site and a chance you'll need to spend more to get the same results.
The political situation is much more worrisome, though, because none of us can predict that. If there's a history of .ly domains being confiscated and if that confiscation was considered legal (even in the short-term), then there's no guarantee that won't happen again. That's a risk we can't calculate in SEO terms. The fact that even Bitly eventually went to bitly.com doesn't bode well.
My gut feeling is that (1) there are no magic domain names, and you're going to have to advertise/market/promote any new domain, and (2) given the geo-political situation there is more than average risk (vs., say, a .co domain or one of the new TLDs). There's a lot I don't know about your situation, but I think your hesitation is warranted.