[JURIST] The United States and Libya reached an agreement [US DOS press release; press statement] on Thursday to settle all pending lawsuits brought by US terror victims against Libya, including 26 lawsuits related to the 1988 bombing of Pan Am Flight 103 [BBC backgrounder; JURIST new archive] over Lockerbie, Scotland. The move is part of a continuing effort to improve diplomatic relations between the two countries. Under the agreement, a fund will be started to compensate both US and Libyan victims of terrorism. The agreement also gives Libyan officials immunity from future terror-related lawsuits brought by US citizens. Some relatives of Flight 103 victims expressed anger at the deal. AP has more.

Earlier this month, US President George W. Bush signed [press release; JURIST report] into law the Libyan Claims Resolution Act [S3370 materials], which allows the Secretary of State to settle remaining civil claims brought by US citizens against Libya for bombings allegedly carried out by groups linked to the government in the late 1980s. In May, the US and Libya agreed to seek resolution of the outstanding claims against the country after President Bush had already urged Congress [JURIST reports] to exempt the country from provisions of the National Defense Authorization Act for Fiscal Year 2008 [HR 4986 materials; JURIST report], which otherwise allows victims of state-sponsored terrorism to sue for that country's assets held in the US. In 2004, Bush lifted decades-old sanctions [JURIST report] against Libya after it agreed to dismantle its weapons programs and to acknowledge its history of state-sanctioned terror.