Page last updated at 14:33 GMT, Monday, 17 November 2008

'Painful' US-Libya era nears end

President George W Bush
President George W Bush spoke by phone to Col Gaddafi

President George W Bush has said that "a painful chapter" between the US and Libya has almost closed, decades after terrorist attacks linked to Libya.

Mr Bush spoke to Libyan leader Muammar Gaddafi about a $1.8bn (1.2bn) payment by Libya to a fund for victims of the 1988 Lockerbie bomb, and other attacks.

Libya made the payment on 31 October, considered the last hurdle in normalising diplomatic relations.

A US spokesman said bilateral talks would continue with Libya.

White House spokesman Gordon Johndroe said in a statement that the two leaders "discussed that this agreement should help to bring a painful chapter in the history between our two countries closer to closure."

From the fund, $1.5 billion will cover compensation claims for the 1988 bombing of Pan Am 103 bombing over Lockerbie, Scotland as well as the 1986 bombing of a German disco.

The Lockerbie bombing killed 270 people, while three people died and more than 200 were wounded in the Germany attack.

Renouncing terrorism

Another $300 million will go to Libyan victims of US airstrikes ordered in retaliation for the disco bombing.

"While we will always mourn the loss of life as a result of past terrorist activities, the settlement agreement is an important step in repairing the relationship between Libya and the United States," the statement said.

"Libya has taken important steps on the road to normalising its relations with the international community, beginning with its renunciation in 2003 of terrorism and weapons of mass destruction.

People visit the Lockerbie Garden of Remembrance (image from May 2000)
The Lockerbie bombing killed 270 people in 1988

"The United States will continue to work on the bilateral relationship with Libya, with the aim of establishing a dialogue that encompasses all subjects, including human rights reform and the fight against terrorism."

Once the payments were received in instalments in October, President Bush signed an executive order restoring the Libyan government's immunity from terror-related lawsuits and dismissing pending compensation cases in the US, the White House said at the time.

Libya has already paid the families of Lockerbie victims $8m (4m) each, but it owes them $2m more.

The fund will also be used to compensate relatives of seven Americans who died in the bombing of a French UTA airliner over Chad in 1989.

Relatives of non-US victims of the UTA bombing accepted a payment of $1m each from the Gaddafi International Foundation for Charity Associations in 2004.

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