The White House on Tuesday delayed plans to lift US travel restrictions to Libya after the Libyan prime minister denied his country's guilt in the 1988 Lockerbie bombing.
Washington immediately demanded a retraction of the comments by Prime Minister Shokri Ghanem, who said Tripoli had only agreed to pay compensation to bombing victims in order to "buy peace."
US President George W. Bush had been poised to ease the decades-old travel ban and take other steps on Tuesday to reward Libya for scrapping its nuclear arms programs. But officials said the announcement was put on hold in protest.
US officials said they expected the Libyan government to issue a statement backing away from Ghanem's comments. If it does so, the White House was likely to go forward with plans to lift the travel ban later this week.
"Libya made it very clear in their letter to the United Nations that it accepts responsibility for the actions of its officials on that very matter [Lockerbie]. And I would expect Libya to make clear that that is still their position," said White House spokesman Scott McClellan.
Susan Cohen, whose daughter was among the Lockerbie victims, said the denial showed Libya had not changed its attitudes.
"I think this is outrageous that the US government stands for this. The United States is supposed to be making Libya accept responsibility and here you have the prime minister denying it. I think the United States is giving Libya a pass just to get Libyan oil," she said.
In the first tangible step toward easing US sanctions, Bush had planned to immediately lift restrictions on the use of US passports for travel to Libya and to allow US citizens to spend money should they visit the North African nation.
Bush was also poised to clear the way for Libyan diplomats to work in Washington. The US has already re-established a diplomatic presence in Tripoli after more than 20 years.
"Libya is making important progress in their efforts to dismantle their WMD programs. ... As they take these important steps, they will be able to realize better relations with the United States," McClellan said.
But the White House has made clear that major US trade sanctions would stay in place, at least for the time being. To keep pressure on Tripoli to cooperate, congressional sources said Bush was likely to only gradually lift the ban on direct trade and US imports of Libyan crude oil.
Easing the sanctions could allow US oil companies to resume activities in Libya, which they had to abandon when expanded US sanctions forced them to pull out in 1986. OPEC member Libya produces around 1.4 million barrels daily.
After years of negotiations, Libya agreed last year to pay US$2.7 billion in compensation for Lockerbie victims, many of whom were Britons and Americans on Pan Am flight 103 when it was blown up over the Scottish town.
Unless Washington drops Libya from its state sponsors of terrorism list and ends its bilateral sanctions by April, Libya is entitled under a compensation deal reached last year to halve the US$10 million payout it has promised relatives of each victim of the 1988 Lockerbie airliner bombing. However, that deadline can be extended if Libya and the relatives agree.
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