Friday’s announcement came after a telephone conversation on Tuesday between European Commission President Romano Prodi and Libyan leader Muammar al-Qadhafi.

Political and economic doors have been opening for Libya since Tripoli said in December that it was giving up its quest for chemical, biological and nuclear weapons.

"The time has come for Libya to join the circle of EU friends," the Commission quoted Prodi as saying.

Prodi was ready to receive al-Qadhafi in Brussels as soon as possible to formalise Tripoli's membership of the Euro-Mediterranean Partnership, the Commission said in a statement. Al-Qadhafi had replied he was ready to consider such a move.

"The time has come for Libya to join the circle of EU friends"

Romano Prodi,
President, European Commission

The Euro-Mediterranean Partnership links the 15-nation EU to 12 countries around the Mediterranean - Morocco, Algeria, Tunisia, Egypt, Israel, Jordan, the Palestinian Authority, Lebanon, Syria, Turkey, Cyprus and Malta.

One of its main aims to create an area of shared prosperity through the progressive establishment of a free-trade area coupled with EU aid for economic transition.

Observer only

Libya currently has observer status at certain meetings of the group.

The EU had previously declined to accept Libya as a full member because of international sanctions against Tripoli in retaliation for the bombing of a PanAm passenger jet over the Scottish town of Lockerbie in 1988.

The United Nations agreed to lift the sanctions in September 2003 when Libya agreed to pay $2.7 billion in compensation and accept responsibility for the bombing. That followed the conviction of a former Libyan intelligence agent for the bombing.

Washington wants to see Libya
take more steps

US sanctions, however, remain in place

No rush says US

The United States said on Friday that it would not be hurried into lifting sanctions on Libya despite a reminder from the country's prime minister that millions of dollars in compensation for families of the victims of the Lockerbie bombing are at stake.

The State Department said US sanctions on Libya would not be lifted until Tripoli meets the requirements for their removal and not before.

"As far as the subject of lifting sanctions goes, our focus is on Libyan actions and Libyan performance," deputy spokesman Adam Ereli told reporters.

"We've made it clear that as Libya moves forward in fulfilling its commitments to divorce itself from any connection to terrorism and to abjure and dismantle its WMD programs, we would be willing to discuss bilateral relations," he said.

"But it hasn't gotten beyond that at this point," Ereli said.