Military

DATE=9/11/03

TYPE=CORRESPONDENT REPORT

TITLE=U-S / FRANCE / LIBYA (L O)

NUMBER=2-307410

BYLINE=DAVID GOLLUST

DATELINE=STATE DEPARTMENT

CONTENT=

VOICED AT:

INTRO: The United States has welcomed an agreement between France and Libya that clears the way for a U-N Security Council vote Friday lifting sanctions against the Muammar Gadhafi government. Secretary of State Colin Powell discussed the issue Thursday by telephone with his French counterpart, Dominique de Villepin. V-O-A's David Gollust reports from the State Department

TEXT: The French-Libyan compensation deal not only opens the way to a Security Council vote expected Friday but also defuses a potential crisis in the already-strained U-S-French relationship.

Libya and lawyers for relatives of those killed in the 1988 downing of Pan Am flight 1-0-3 over Scotland last month concluded an agreement under which Libya accepted responsibility for the terror attack and agreed to pay as much as two-point-seven billion dollars in compensation.

But France had threatened to veto the lifting of U-N sanctions against Libya, which was part of the Pan Am deal, unless Libya agreed to increase compensation to families of victims of a similar attack on a French U-T-A jetliner in 1989 over Niger.

The United States reluctantly agreed to several postponements of the U-N sanctions vote to give French officials a chance to improve the less-generous U-T-A compensation deal reached in 1999, and such an accord was finally reached in Libya Wednesday night.

French Foreign Minister Dominique de Villepin telephoned U-S Secretary of State Colin Powell Thursday to brief him on the deal and to drop the veto threat, a development welcomed by State Department spokesman Richard Boucher:

/// BOUCHER ACT ///

The fact that the U-T-A families appear to have gotten some additional settlement is good for them. We also think it's very important to move forward on the Pan Am 1-0-3 families, who have been waiting a long time and seen this vote delayed four times. And we now have the prospect of doing that tomorrow (Friday) morning.

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The Bush administration had said that a French veto at the U-N would have had severe consequences in a relationship still strained by the two countries' diplomatic fight over the Iraq war earlier this year.

The latest development should improve the atmosphere for Mr. Powell's meeting Saturday in Geneva with Mr. de Villepin and foreign ministers of the other three permanent Security Council members, Russia, China and Britain.

U-N Secretary-General Kofi Annan called the unusual session to discuss the Bush administration's draft resolution to increase the United Nations' role in peacekeeping, and the political transition, in Iraq. (SIGNED)

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