and creates a fund for victim payments . `` The Libyans did n't believe that Congress would ever be helpful , and Congress did n't think Libya would ever do it , '' Welch said Thursday . `` We found a diplomatic way to accommodate both sides by turning suspicion into an asset . '' Under the new law , Congress gives the Bush administration the authority to restore sovereign immunity for Libya only when the United States receives the agreed-upon money to pay American claimants in the fund and the secretary of state certifies it . See a timeline of events following the Pan Am attack '' Once the money is received into the fund , Libya would be exempted from legislation passed this year enabling terrorism victims to be compensated from frozen assets of governments blamed for attacks . The 1988 bombing of Pan Am Flight 103 over Lockerbie , Scotland , killed 270 people , including 189 Americans . The 1986 La Belle disco bombing in Berlin , Germany , killed two American servicemen and injured 79 Americans . Libya has paid 268 families involved in the Pan Am bombing $ 8 million each of a $
WASHINGTON -LRB- CNN -RRB- -- Libya will pay hundreds of millions of dollars to victims of terrorist attacks involving Americans in an agreement signed and finalized Thursday , the U.S. State Department said . U.S. Assistant Secretary of State David Welch , left , and Libyan Deputy Foreign Minister Ahmad Fitouri sign the deal . Assistant Secretary of State David Welch signed the deal in Tripoli , Libya , on Thursday . If implemented , the deal will end Libya 's legal liability in numerous lawsuits from families of victims of what the United States considers Libyan terrorist acts . It also paves the way for stronger ties between the two nations and increased U.S. involvement in the oil-rich nation . `` This resolves the last major historical issue that has stood in the way of a more normal relationship between our two countries , '' Welch said . The deal had hinged on congressional approval . Last month , just before leaving for summer recess , Congress unanimously adopted the Libyan Claims Resolution Act , sponsored by Sen. Frank R. Lautenberg , D-New Jersey . The legislation cleared the way to end the feud with Libya over terrorist attacks