U.S. officials have had "positive discussions" with Libya, but the country hasn't agreed to take the steps that would prompt the administration to remove it from the list of states that support terrorism, administration officials said Wednesday.
The North African country has recently been seeking to cultivate better relations with the United States. Representatives of the government in Tripoli have been talking to U.S. and British officials about complying with U.N. requirements aimed at forcing Libya to renounce terrorism and own up to past acts.
The government in Tripoli has also been in compensations talks with families of victims of the 1988 bombing of Pan Am Flight 103, for which the United States holds Libya responsible.
White House Press Secretary Ari Fleischer said that while the United States and Libya have had discussions, Tripoli has not agreed to apologize for the Pan Am bombing or to pay compensation to the victims. "Libya knows what it has to do. . . . That has not taken place yet," Fleischer said.
State Department spokesman Richard Boucher said that although Libya has been working to improve its public image, "what we're looking for is action. We haven't seen it."
He added that recent talks with the Libyans in London don't "represent any kind of new initiative or shift in our relationship. . . . There's been no change in our policy toward Libya."
Repairing relations with Libya would be a major step and offer a variety of benefits for both sides.
For the United States, it could bring some intelligence help in its war on terrorism and would demonstrate to other countries in the region that they can take steps to return to America's good graces. It would mean substantial economic benefits for Libya, which badly wants U.S. oil industry expertise and has been under a U.S. trade ban.
Normal relations could enable U.S. oil concerns and other companies to recover valuable assets that they left in the country when relations deteriorated.
Libya has demonstrated in the past that it is willing to pay compensation to victims of terrorism and is willing to acknowledge responsibility. Experts close to the situation believe that Libyan officials will ultimately do what is necessary to satisfy the United Nations and the United States.
Lee Kreindler, a New York lawyer who has been negotiating with Libya on behalf of some families, said he is optimistic that a compensation agreement can be reached.
Yet there are complications. Some relatives of the 270 bombing victims insist that the United States take firmer action to punish Libya and say there should be no compensation deal. Their point of view has some backing in Congress.
There are also legal questions about whether Libya would agree to a compensation settlement with some families if the deal left unresolved the question of other potential legal claims stemming from the crash over Lockerbie, Scotland.
Edward Walker, a former U.S. assistant secretary of State, said questions remain about how the Libyans could acknowledge responsibility for the bombing.
Even so, he said he believes that the Libyans will find a way to reach an agreement "because I think the relationship with the United States is, in the last analysis, important for them."
Libyan leader Moammar Kadafi denounced the Sept. 11 terrorist attacks in the U.S., and officials of his country have called publicly for an improvement in relations with the United States. He has already cracked down on militants in his country and has forced some to leave Libya.
The State Department's list of countries that support terrorism now cites Libya, Iraq, Iran, North Korea, Sudan, Syria and Cuba.
Although Sudan was a target of U.S. cruise missiles after the 1998 bombings of two U.S. embassies in East Africa, that country has also been trying to mend relations with the United States. Syria has also taken steps to show its opposition to terrorist acts.
Last year, a Scottish court in the Netherlands convicted a Libyan intelligence agent of killing the 259 people aboard the Pan Am jet and 11 more on the ground.