The Khaddafy regime has also refused to pay compensation to the families
of two U.S. soldiers killed in the Berlin bombing. Officials said Tripoli
has sought to link compensation to U.S. military and dual-use sales.
The Libyan refusal has blocked State Department plans to build an
embassy in Tripoli. Congress has also approved legislation that would enable
victims of attacks deemed terrorist to freeze Libyan assets in the United
States. President George Bush signed the bill in January 2008, but has
appealed for a waiver for Libya.
Officials said the State Department has proposed the establishment of a
global compensation fund to pay families of the U.S. victims of Libyan and
other attacks. They said Libya, who suggested a comprehensive settlement in
March 2008, has pledged to examine the idea.
On May 28-29, Assistant Secretary of State for the Near East David Welch
led a U.S. delegation with Libya in talks on compensation as well as the
lifting of U.S. restrictions on dual use exports. No breakthrough was
announced after the session, which took place in London.
"In this context, both parties reiterated their commitment to further
develop bilateral cooperation," the joint statement said. "They affirmed
their mutual cooperation to combat terrorism. They also recognized the 2003
historic and courageous decision taken by leader Khaddafy to renounce
weapons of mass destruction.