A U.S. official says the Bush administration hopes to establish full diplomatic relations with Libya possibly later this year.  Acting Undersecretary of State for Political Affairs, William Burns, told a congressional Wednesday Libya is adhering fully to its commitments under an agreement to end its development of weapons of mass destruction, but Washington has continuing serious concerns about human rights and other issues. 

Mr. Burns says Libyan leader Moammar Gadhafi's adherence to commitments, and actions in other areas have opened up new opportunities.

"Libya has adhered scrupulously to its WMD commitments and its dismantling of its previous programs has offered a powerful, positive example to other countries,? said Mr. Burns.  ?Over recent years, Libya has also taken substantial steps to distance itself from its prior support of terrorist organizations, and has provided valuable cooperation in the global war on terrorism."

This progress, he adds, has included playing a more constructive role in Africa, including helping to open up a humanitarian aid corridor to Sudan's Darfur region.

Libya has also provided financial aid to the new Palestinian leadership and recognized Iraq's new transition government.

Lawmakers on Capitol Hill would like to see more rapid progress toward normalization between the United States and Libya.

Congressman Henry Hyde, chairman of the House International Relations Committee, says this would provide a powerful example to others.

"I believe it is crucial that the United States and the international community reward Libya for these actions if for no other reason [that] such reward could powerfully influence other rogue regimes who are developing weapons of mass destruction including Iran and North Korea," said Mr. Hyde.

But Congressman Hyde and others concede the situation isn't that simple.

Saudi Arabia suspects Libya of involvement in a failed assassination attempt against Crown Prince Abdullah in 2003.  A public trial of 13 suspects, including eight Saudis and five Libyans, is expected to take place in coming weeks. 

Undersecretary Burns says this issue, and Libya's need to address human rights concerns, stand in the way of normalization of relations.

"Just as with any other country the quality and pace of our relations will reflect the decisions Libya makes on reform and the expansion of political freedoms,? he said.  ?We have significant concerns on other issues too. One of them does involve allegations of a Libyan plot to assassinate Saudi Crown Prince Abdullah about which many troubling questions remain."

At present, 19 American diplomats are stationed at a U.S. liaison office in Tripoli.  Mr. Burns says it is hoped a temporary embassy can be established later this year.

Congressman Tom Lantos says he hopes the question of alleged Libyan involvement in the Saudi plot does not delay that process.

"I merely urge the administration not to allow the Saudi-Libyan dispute which may go on ad infinitum and ad nauseum to stand in the way of moving towards normalization of relations between the United States and Libya," he said.

In his testimony, Acting Undersecretary Burns said the United States and Libya will have to address outstanding issues, in his words, thoroughly and methodically. 

Meanwhile, he says Libya must continue address the financial and other concerns of families of victims from the 1988 terrorist bombing of Pan American Flight 103, as well as those from the 1986 bombing of the Berlin La Belle: disco which killed three people, including two U.S. servicemen, and injured 250.