White House officials say the United States has had talks recently with Libya, but they deny they are anywhere near a deal to remove Libya from the U.S. list of nations that sponsor terrorism.

When he was asked about a potential deal with Libya, White House spokesman Ari Fleischer offered a swift denial. "There have been positive discussions with Libya, but Libya has still not fully complied with its United Nations Security Council resolutions," he said. "The United States government is not - not - negotiating a compensation settlement with the Libyans."

Earlier, USA Today reported the two sides were close to a deal that would remove Libya from a U.S. list of terrorism sponsors and require Tripoli to pay $6 billion in compensation for the 1988 bombing of an American jumbo jet over Scotland.

According to Mr. Fleischer, the report was "way off the mark." "As we said before," he stressed, "we are committed to preserving the rights of the families of Pan Am 103 victims and will not undercut their pending claims."

Libya has been on the State Department's list of terrorism sponsors since its inception in 1979. Others on the list include Cuba, Iraq, Iran, Syria, Sudan and North Korea.