US, Libya, Finalize Deal on Terrorism Compensation

The United States and Libya Thursday signed an agreement in Tripoli,
designed to settle all remaining U.S. compensation claims from
Libyan-sponsored acts of terrorism in the 1980s. Lingering claims
disputes have been blocking the full normalization of relations between
the two countries. VOA's David Gollust reports from the State Department.

The
signing of the comprehensive claims settlement agreement climaxes a
major push by the two governments in recent months to resolve the
compensation issue, and Assistant Secretary of State for Near eastern
Affairs David Welch said in Tripoli it will "turn a new page" in the
bilateral relationship.

The U.S.-Libyan rapprochement began in
2003, when the Tripoli government renounced weapons of mass destruction
and terrorism and agreed to pay compensation for terror attacks
attributed to Libya - most notably the 1988 bombing of a U.S. Pan Am
jumbo jet over Lockerbie, Scotland that killed 270 people.

Libya
agreed to provide $10 million in compensation to the families of each
Lockerbie victim in a phased payout linked to normalization steps. But
the process became bogged down in legal disputes, with the remaining
$500 million of the $2.7 billion package unpaid.

Under the
agreement signed Thursday, Libya is to put up an additional sum of
about $1 billion to be distributed by a new entity set up by the U.S.
government, to Lockerbie families and victims of other attacks,
including the 1986 bombing of a Berlin disco that killed two U.S.
soldiers. The deal would also settle Libyan claims from U.S. air
strikes against Libya in the 1980s.

State Department Deputy Spokesman Robert Wood described the accord in a briefing for reporters.

"The
agreement is designed to provide rapid recovery of fair compensation
for American nationals with terrorism-related claims against Libya," he
said. "It will also address Libyan claims arising from previous U.S.
military actions. The agreement is being pursued on a purely
humanitarian basis, and does not constitute an admission of fault by
either party."

The effort to resolve the compensation issue
cleared a major hurdle two weeks ago, when the U.S. Congress approved
and President Bush signed, a measure giving Libya immunity from further
terrorism-related U.S. lawsuits once compensation for remaining cases
had been paid through the new fund.

Though the United States and
Libya announced a normalization of relations in 2006, members of
Congress concerned about compensation cases had blocked funds for
building a U.S. embassy in Tripoli and prevented a full U.S. ambassador
from taking up residence there.

U.S. oil companies and other
firms have begun operations in Libya in recent years but Libyan
investment in the United States has been severely limited by the
prospect of asset seizures stemming from terrorism cases.

In his
remarks in Tripoli, Assistant Secretary Welch said the agreement would
resolve the last major historical issue that has stood in the way of a
more normal U.S.-Libyan relationship.

Welch met Libyan leader
Muammar Gadhafi Wednesday and said he had conveyed the best wishes of
the American government and a personal message to Mr. Gadhafi from
President Bush.