Kadhafi believes the Lockerbie case was "about to be closed"

WASHINGTON, August 12 (IslamOnline.net & News Agencies) - Libya appears ready to admit responsibility for the 1988 Lockerbie bombing and pay compensation to the victims' families, Secretary of State Colin Powell said late Monday, August 11, after diplomatic talks on the issue were held in London.

"I think we're getting close to a settlement," Powell said, according to a State Department transcript of his comments to reporters after meeting with the UN envoy to Afghanistan, Lakhdar Brahimi, reported Agence France-Presse (AFP).

Powell declined further comment on the matter and later instructed the department to amend the transcript to change the quotation to "I think we're getting closer to a settlement."

The implication of the slight change was not immediately clear. But, media reports in the U.S. have suggested the deal could be finalized later this week.

According to the Washington Post, Libya is due to make a formal statement to the UN Security Council on 14 August.

Powell's comments followed a working-level meeting in London between the United States, Britain and Libya which was called to review a proposed deal amid rising hopes an agreement could be reached as early as this week.

According to the BBC online news service Tuesday, August 12, the UK Foreign Office described the latest discussions as "constructive".

A spokeswoman said no announcement of a settlement was immediately forthcoming and no further meetings were planned at the moment.

Deputy State Department spokesman Philip Reeker would not characterize the meeting but some officials said privately they were hopeful for significant progress, according to the AFP.

"My understanding is that the chances for resolution are good and getting better," one official said. "People are more optimistic now than they have been before."

But another official cautioned that hopes for an agreement that appeared likely in the past had failed to materialize.

Reeker declined to comment on the chances for an agreement, saying only: "We will continue to wait and see how this progresses."

However, indications have grown in recent days that a settlement - which could pave the way for a lifting of UN and U.S. sanctions against Libya - is in the works.

Last week, U.S. officials said there were signs Libya might formally accept blame for the bombing of Pan Am Flight 103 as early as Thursday in a letter to the UN Security Council.

The Boeing 747 was blown up over the Scottish town of Lockerbie on December 21, 1988, killing all 259 people on board plus 11 on the ground.

On Sunday, Time Magazine quoted Libyan leader Moamer Kadhafi in an interview as saying his country would take at least limited responsibility for the bombing.

A week earlier, in an interview with the U.S. television network ABC, Kadhafi said he believed the Lockerbie case was "about to be closed."

Libya's acceptance of responsibility for the bombing would follow immediately the signing of a 2.7-billion-dollar settlement deal with the families of the 270 victims, according to lawyers negotiating the deal.

Those lawyers and Libyan representatives have been meeting over the past week to finalize the setup of an escrow account at Switzerland's Bank of International Settlements.

The lawyers have told their clients Thursday is the target date for signing the deal, according to relatives of the victims.

A compensation deal accompanied by an acceptance of responsibility would set in motion a process under which UN and then possibly US sanctions against Libya could be lifted.

As the deal is envisaged, Libya would pay each of the families of the victims 10 million dollars in installments based on the lifting of the sanctions and the removal of Libya from the U.S. list of "state sponsors of terrorism."

After 15 years, will the Lockerbie tragedy come to an end?!

The first four million dollars in compensation would be disbursed to the victims' families when UN sanctions against Libya are lifted following its acceptance of responsibility.

Those sanctions were suspended but not lifted after Tripoli handed over two former Libyan intelligence agents in the case, one of whom was convicted by a Scottish court convened in the Netherlands in January 2001.

The lifting of the UN sanctions would set the stage for a dialogue between Libya and the United States about the lifting of separate U.S. sanctions.

A further four million dollars would be delivered to each family once US sanctions are lifted and the final two-million-dollar payment would be made if Libya is removed the U.S. list of state sponsors.

Washington has stressed, though, that it is not bound by the terms in the private compensation agreement between Libya and the victims' families and have their own criteria for removing U.S. sanctions and the terrorism designation.