[JURIST] The US and Libya have agreed to find a way to speed compensation for families of Americans who were killed by acts of terrorism authorized by the Libyan government, both countries said in a statement [text] issued by the US State Department [official website] Friday. Meeting in London earlier this week, "[b]oth parties affirmed their desire to work together to resolve all outstanding claims in good faith and expeditiously through the establishment of a fair compensation mechanism." The negotiations are seen as a way to normalize relations between the US and Libya and to allow Libya to accelerate development of its oil resources. Libya is believed to have entered into the negotiations because of concern over recent legislation, the National Defense Authorization Act for Fiscal Year 2008 [HR 4986 materials; JURIST report], which allows victims of state-sponsored terrorism to sue for that country's assets held in the US. An agreement between the two nations would likely cover eight terrorist incidents including the 1988 bombing of Pan Am Flight 103 [BBC backgrounder; JURIST news archive] over Lockerbie, Scotland, which killed 270 people, 189 of which were Americans; the 1986 bombing of the La Belle disco in Berlin, Germany [BBC backgrounder], that killed two US servicemen and injured 120 others, including 40 Americans; and the 1989 bombing of French passenger jet UTA Flight 772 [BBC backgrounder], which killed 170 people, including 7 Americans.

In January, a US District Judge ruled [PDF text; JURIST report] that the Libyan government and six Libyan officials should pay more than $6 billion in damages [plaintiff press release] to families of those Americans who died in the Flight 772 bombing. Libya has also agreed to pay $10 million to each family of the Pam Am 103 victims. It has paid 8 million so far but has not made the additional $2 million dollar payment because of disputes over the return obligations of the US. Reuters has more. AP has additional coverage.