2 Nov 2008

Libya pays compensation to families

8:07 am on 2 November 2008

Libya has paid $US1.5 billion into a compensation fund for relatives of US victims of terror attacks blamed on Tripoli, the US state department says.

The fund was agreed in August by the US and Libya to settle remaining lawsuits.

The attacks include the 1988 Lockerbie bombing that killed 270 people and the 1986 bombing of a Berlin disco which killed three and wounded more than 200.

Under the deal, Libya did not accept responsibility for the attacks, but agreed to compensate victims.

Libya has already paid the families of Lockerbie victims $US8 million each, but it owes them $US2 million 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.

Relations between Libya and the US improved in 2003, when Tripoli stopped working on weapons of mass destruction.

The decision led to the restoration of US diplomatic ties with Libya in 2006.

In turn, it was removed from America's list of countries sponsoring terrorism.

Looking to Russia

Libyan leader Muammar Gaddafi said he wanted closer energy ties with Russia, shifting the emphasis away from the arms sales which until now have been at the core of their relationship.

Russia is in a three-way race with Europe and the United States to secure lucrative contracts with Libya.

Mr Gaddafi is in Moscow for talks with Russian President Dmitry Medvedev.