In 2003, Libya accepted responsibility for the 1988 attack on the Pan Am flight 103 that killed 270 people. Tripoli agreed to pay the families of the dead victims millions of dollars each in compensation.

Two Libyan intelligence agents were turned over to an international court in The Hague in 1999. One of the men, Abdel Basset Ali Al Megrahi, was sentenced to 27 years in prison in 2003, which prompted the UN Security Council to vote unanimously to lift sanctions imposed on Libya in 1992.

But some of the American relatives of those killed voiced outrage and complained that they had not been told in advance.

Susan Cohen, whose 20-year-old daughter was killed in the attack, said: "It is a dangerous move and now they have rewarded the terrorists. The only reason they are doing this is oil."

Some considered the move with resignation. Robert Monetti, who lost his son, said: It's not a surprise. It's surprising it took this long... Countries cannot stop doing business just because of things like this."

Others welcomed the decision.

John Zwynenburg, who also lost a son, said: "It's a positive step. It's better to make peace with other nations than going at war with them. Hopefully, we'll continue to help them improve their relations with other nations."

David Welch, the US assistant secretary of state, said he understood relatives' anger but said that Libya had fulfilled its obligations. "Libya is out of the terrorist business."