BBC's Rob Watson: Libya is anxious to end its international isolation

A day before a visit by the United Nations Secretary-General Kofi Annan, the official Libyan news agency Jana said Libya's leader Colonel Gaddafi had no power to sign any deal.

Rob Watson: Kofi Annan has not received any assurances from the Libyan leader

"Colonel Gaddafi is neither head of state nor head of government, nor foreign minister, which completely rules out any possibility of his reaching any accord," Jana said.

The UN has also played down expectations of a concrete deal over the transfer of two Libyans accused of blowing up the Pan-Am airliner over Scotland 10 years ago.

The BBC's Barbara Plett: "Solutions to problems holding up the extradition"

UN spokesman Fred Eckhard warned there was no guarantee that Mr Annan would persuade Colonel Gaddafi, to release the two men for trial in return for the suspension of sanctions.

Annan: Hoping to end impasse

He said: "We're going to Libya without a conviction that we will succeed.

However, Reuters quoted a senior North African diplomat as saying that Mr Annan may have received assurances that a deal could be achieved.

"There were one or two outstanding points, and if Mr Annan decided to go ahead with the trip to Libya that means that he is hopeful they will be overcome," he said.

North Africa correspondent Heba Saleh says it seems the Libyan authorities are now trying to delay a final decision.

Once and for all

The BBC's Andrew Cassell: Momentum for a deal seems to be building

Mr Annan said in Tunisia on Friday that he hoped to settle the case "once and for all". He is trying to end delays caused by Libyan requests for clarifications on how the trial would be conducted and where any sentences would be served.

Libya has agreed in principle that the two men, Abdel Basset al-Megrahi and Al-Amin Khalifah Fhimah, could be tried in the Netherlands before Scottish judges.

The UN says if this happens, it will end sanctions imposed on Libya six years ago.

BBC's Nick Pelham: Sentence issue remains

But a key sticking point remains over where the two, if found guilty, would serve their sentences. Libya has said it is not prepared for them to be jailed in Scotland.

On Wednesday Mr Annan said his officials had made good progress on negotiating the extradition of the two Libyans.

Correspondents say Mr Annan is not empowered to negotiate any new terms beyond how the two will be transported to the Netherlands for trial.

The bombing of Pan Am flight 103 in 1988 killed 270 people.

Key facts on Lockerbie
Profile: Muammar Gaddafi, Libyan maverick
Profile: Kofi Annan, Master of diplomacy