The announcement by the White House came a day after Libya rebuked statements by Libyan Prime Minister Shokri Ghanem, who had denied his country's guilt in the 1988 Lockerbie airliner bombing.

Sean McCormack, spokesman for the White House National Security Council, said the US decision was "in recognition of Libya's concrete steps to repudiate weapons of mass destruction, and to build the foundation of Libya's economic growth and re-integration with the international community."

As a result, McCormack said, "The United States will take steps to encourage Libya to continue on this path, including rescinding restrictions on the use of American passports for travel to Libya, as well as other steps."

Trade sanctions

Lifting the travel ban will allow US oil companies to travel to Tripoli to negotiate deals for the day that US trade sanctions are lifted. Libya is eager to bring US companies back, especially in the oil industry, its main source of foreign earnings.

Ghanem angered US officials and delayed the announcement by a day by denying Libya's guilt in the 1988 Lockerbie airliner bombing and saying Tripoli had only agreed to pay damages to victims in order to buy peace.

Libya was forced to issue a retraction on Wednesday, reverting to their position as stated last August. At the time Libya had sent a letter to the United Nations saying Libya helped bring two suspects charged with the bombing to justice and "accepts responsibility for the actions of its officials."

"Libya's retraction yesterday clarified that their statement of August 15 still stands," McCormack said.