US, Libya closer to Lockerbie deal

The two countries pledged to work together for a comprehensive settlement that would speed up the resolution of lawsuits that have dragged on for two decades, plus other legal and insurance cases affecting US and Libyan victims.

The 1980s-era terror cases in particular have clouded a deal that Libyan leader Muammar Gaddafi struck to give up weapons of mass destruction in return for improved relations with the US.

Libyan officials have become increasingly frustrated by what they regard as US delays in making diplomatic and political concessions to Libya.

"Both parties affirmed their desire to work together to resolve all outstanding claims in good faith and expeditiously through the establishment of a fair compensation mechanism," Libya and the US said in a joint statement.

Libya has long said it wants to resolve outstanding compensation claims from the US families of victims of the 1980s attacks, but legal and financial arrangements bogged down.

Libya had agreed to pay £5 million to each victim of the 1988 bombing of Pam Am flight 103 over Lockerbie, Scotland, but it has not made the final payment because of a dispute over US obligations in return.

The all-in-one deal would address Lockerbie bombing, along with the 1986 bombing of a Berlin disco and the 1989 bombing of a French UTA airliner. It would also address about five other alleged terrorism cases involving Libyan suspects and a handful of cases or judgments in Libyan courts as well.

A US State Department official said both nations wanted "legal peace" and a clean slate. The official offered no timetable for reaching the agreement with Libya or for actually ending the court cases. It was not clear whether the full deal could be resolved before President George Bush leaves office in January 2009.

The Pan Am bombing killed 270 people, including 189 Americans. Two US servicemen died in the Berlin disco bombing. Libya was implicated in both cases.