Libya and the United States signed a comprehensive deal today to compensate all US and Libyan victims of bombings.
The US victims include those who died in the 1988 bombing of Pan Am Flight 103 over Lockerbie that killed 270 people and the 1986 attack on a Berlin disco that killed three people and wounded 229.
Libyans killed in 1986 when US warplanes bombed Tripoli and Benghazi are also covered by the pay-out.
Libya, a major oil producer, said at least 40 people were killed, including Libyan leader Muammar Gadafy's adopted daughter, in the US strikes.
In Washington, a State Department official confirmed the signing of the deal.
"This international agreement between the two sides ends any pending issue between Tripoli and Washington. It clears the way for normal and complete relations between Libya and the USA," said Azzam Eddine, a member of the Libyan team who negotiated the deal.
US Assistant Secretary of State David Welch, the US senior diplomat for the Middle East who was in Tripoli for the signing, told reporters: "I'm optimistic that this agreement will be implemented soon. This agreement will settle the last major issue, which is compensation."
After more than a decade of international isolation, Libya has been slowly coming in from the cold since 2003, when it accepted responsibility for the Lockerbie bombing and announced its would stop pursuing nuclear, chemical and biological weapons.
The United Nations lifted multilateral sanctions in 2003.
Today's agreement would end the legal liability on Libya stemming from multiple lawsuits by families of the US victims and it would allow a further warming in ties between Tripoli and Washington, Libyan officials said.
They declined to give financial details on the compensation, including who would pay the Libyan victims.
Reuters