Diplomats at the United Nations and Washington say Libya has agreed on terms for a deal with the United States and Britain to take responsibility for the 1988 Pan Am 103 bombing over Lockerbie, Scotland.

The diplomats said late Tuesday that officials from all three governments have signed off on an agreement. They said all that is left are what they call "practical steps."

A U.S. State Department official has told VOA that while progress is being made towards a settlement, the families must accept the deal, which would also make it acceptable to the Bush administration.

He also said no official announcement can be expected before the end of the week.

Under the agreement, Libya would open a $2.7 billion escrow account in a Swiss bank to compensate the victims. There has been no comment from lawyers for the 270 families of the victims of the attack.

Libya would also accept responsibility for the bombing, renounce terrorism, and agree to cooperate with any further Lockerbie investigation.

If Libya fulfills the terms, the U.N. Security Council would vote to lift economic sanctions imposed in 1992.

It is not yet clear if or when the United States would consider ending its own separate sanctions against Libya or remove it from the list of state sponsors of terrorism.

Pan Am Flight 103 blew up over Lockerbie, Scotland in December 1988, killing all 259 passengers and 11 people on the ground.

A Scottish court sitting in the Netherlands convicted a Libyan agent in 2001 for planting a bomb on the plane.

He is serving life in prison. A second agent was acquitted.