The son of Libyan leader Moammar Gadhafi says Libya expects to be taken off the U.S. list of nations that sponsor terrorism by the end of this year.

Seif el-Islam told reporters late Monday that he also believes the United States and Libya will soon exchange ambassadors for the first time in more than three decades.

However, a U.S. State Department spokesman says there are still issues to be addressed before Libya can be removed from the terror list and resume full diplomatic ties with Washington.

The United States and Libya restored low-level diplomatic relations in June 2004, after a gap of 24 years.

The move came after Libya abruptly ended its pursuit of weapons of mass destruction, and admitted responsibility for the 1988 bombing of a U.S. Pan Am jetliner over Scotland.

Some information for this report provided by AFP and Reuters.