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Libya Begins Payments to Terrorism Victims' Fund

The State Department said Thursday Libya has made a substantial initial payment into a U.S.-administered fund to settle remaining claims from Libyan-inspired acts of terrorism. The settlement plan would clear the way to fully-normalized U.S.-Libyan relations. VOA's David Gollust reports from the State Department.

Officials are not saying just how much the Libyan payment was, but they do say that it is substantial and evidence of Libyan good faith in fulfilling a compensation deal reached in August.

The process of normalizing U.S.-Libyan relations, which began when Libya renounced terrorism and weapons of mass destruction, has been stopped short of completion over lingering terrorism compensation claims.

In 2003 Libya accepted responsibility for several acts of terrorism in the 1980s including the 1988 bombing over Scotland of a Pan Am jumbo jet which killed 270 people.

Libya paid most of a $2.7 billion compensation package negotiated with Pan Am victims' families but the process broke down amid legal disputes.

The U.S.-Libyan accord reached in August set up a nominally-voluntary fund that would pay remaining claims of American claimants, and to Libyans who have sought compensation in that country's courts for U.S. retaliatory air strikes in 1986.

In a telephone conference call with reporters Thursday, Assistant Secretary of State for Near Eastern Affairs David Welch said the U.S.-run "humanitarian" fund will eventually total $1.8 billion, of which 300 million would go to settle the Libyan claims.

Welch, who led the U.S. negotiating team for the accord, said the Libyan payment is a "substantial indication" of Libya's commitment to fully implement the deal, and said he is optimistic the process will be finished soon.

"I've always said I was optimistic," he said. "But I've also always said that I didn't want to put a timetable down. Of course in our private discussions, we've had some exchanges about our expectations on how soon this would move. And I would note, as I said earlier, that it's a promising thing that a substantial deposit has actually now been received, and directly into a U.S. government account."

Once the account is fully funded, the Bush administration is to grant Libya immunity from additional terrorism-related court cases, and then remaining compensation is to be distributed.

Welch was not specific about the source of the Libyan payment but said the Libyan government has asked Libyan and other companies doing business in that country to contribute to the fund.

He said he did not know if American companies operating in Libya had been solicited or made contributions, but said Libyan authorities have been told the U.S. government "would not countenance" pressure tactics to get them to participate.

The two countries announced a normalization of relations in 2006 and Condoleezza Rice in September paid the first visit to Libya by a U.S. Secretary of State in over 50 years.

However, congressional restrictions related to compensation have prevented a full U.S. ambassador from taking up residence in Tripoli, and have barred funding for a new U.S. embassy there.