Country Reports on Terrorism 2008 - Libya

The United States rescinded Libya's designation as a state sponsor of terrorism in June 2006. Libya renounced terrorism and weapons of mass destruction in 2003 and has continued to cooperate with the United States and the international community to combat terrorism and terrorist financing.

In November 2007, Egyptian cleric and al-Qa'ida (AQ) leader Ayman al-Zawahiri announced a merger between AQ and the Libyan Islamic Fighting Group (LIFG). In an audiotape, al-Zawahiri urged AQ fighters to topple the Government of Libya, describing Muammar al-Qadhafi as an "enemy of Islam" and criticizing the 2003 decision to renounce WMD and terrorism. According to press accounts, LIFG maintains a limited presence in eastern Libya and has facilitated the transfer of foreign fighters to join insurgents fighting U.S.-led forces in Iraq.

On August 14, Libya and the United States signed a comprehensive claims settlement agreement to provide compensation to claimants in both countries who allege the other country's responsibility in incidents causing injury or death. Included in the settlement agreement are claims stemming from the 1988 bombing of Pan Am flight 103 in Lockerbie, Scotland, and the 1986 bombing of the La Belle nightclub in Berlin. On October 31, the Secretary of State certified to Congress that settlement funds had been received, paving the way for the confirmation of a U.S. Ambassador to Tripoli and the expansion of normalized relations.