Libyan Leader Moammar Gadhafi embraced convicted Lockerbie bomber, Abdelbaset  al-Megrahi, as he arrived in Libya after being released from his life sentence.

Mr. Gadhafi praised Scottish authorities for having what he called the "courage" to allow Megrahi, who is terminally ill, to return home.

Video aired on Libyan television shows Colonel Gadhafi hugging Megrahi during a meeting Friday night.  Megrahi then takes the Libyan leader's hand and kisses it, before the two men sit and talk with members of Megrahi's family and other well-wishers.

Britain and the U.S. have condemned the "hero's welcome" of the man convicted of killing 270 people in the 1988 airplane bombing.  U.S. President Barack Obama called the scenes "highly objectionable."

Meanwhile, Britain's foreign office denied allegations Megrahi's release is connected with a trade deal.

Media reports quoted Mr. Gadhafi's son as saying the release is linked to commercial interests with oil-rich Libya.  But a British foreign office spokesman says "there is no deal."

The Scottish justice minister announced Megrahi's release Thursday, saying the convicted bomber and former Libyan intelligence officer is near death from prostate cancer.

Megrahi received a life prison sentence for the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland.

In an exclusive interview with The London Times newspaper, Megrahi insisted he was innocent, and he said he would present new evidence that exonerates him.

He also said it is natural that the victims' relatives were infuriated by his release.

Some information for this report was provided by AFP and Reuters.