The United States and Libya are set to renew diplomatic relations after signing a deal to compensate all victims of bombings involving the two countries.
The agreement will fully compensate victims of the 1988 Lockerbie bombing, and of the bombing of a Berlin disco two years earlier.
It will also address Libyan claims arising from US attacks on the Libyan capital, Tripoli, and Benghazi in 1986.
The deal was signed in Tripoli by US and Libyan officials.
David Welch, US assistant secretary of state and Washington's top Middle East diplomat, met Ahmed al-Fatroui, head of America affairs, in Libya's foreign ministry to seal the agreement.
Mr Fatroui says it is "the crowning of a long process of exhausting negotiations".
Mr Welch said it was a very important agreement that "turns a new page in our relationship".
Libyan state media said US President George W Bush had sent a message to the Libyan leader, Muammar Gaddafi, saying he hoped relations between the two countries would continue to improve.