Libya, U.S. cut deal to settle all terror-related lawsuits

Libya and the United States settled all outstanding lawsuits by American victims of terrorism on Thursday, clearing the way for the full restoration of diplomatic relations.

There were 26 pending lawsuits filed by American citizens against Libya for the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, and other attacks, said a senior Libyan government official, who spoke on condition of anonymity because the details had not been publicly announced. He said there were also three outstanding lawsuits filed by Libyans for U.S. airstrikes on Tripoli and Benghazi in 1986 that Libyans say killed 41 people, including leader Moammar Gadhafi's adopted daughter.

“The agreement is designed to provide rapid recovery of fair compensation for American nationals with terrorism-related claims against Libya,” State Department spokesman Robert Wood said in a statement. “It will also address Libyan claims arising from previous U.S. military actions. The agreement … does not constitute an admission of fault by either party.”

The settlement completes a nearly five-year effort to rebuild ties between the two countries.

The agreement will be followed by a U.S. upgrading of relations with Libya including the opening of an embassy in Tripoli, the confirmation of a U.S. ambassador and a visit by Secretary of State Condoleezza Rice before year's end. It will also allow direct U.S. aid and gives immunity to the Libyan government from any further terror-related lawsuits, the Libyan government official said.

The mother of one Lockerbie victim called the deal a “triumph for terrorism.”

The U.S. had no diplomatic relations with Libya from 1980 until late 2003, when Gadhafi pledged to abandon his weapons of mass destruction programs, stop exporting terrorism and compensate the families of victims of the Lockerbie bombing and other attacks.

After that, the nation was given a reprieve from U.N., U.S. and European sanctions, removed from the State Department's list of state sponsors of terrorism and allowed a seat on the U.N. Security Council.