Bush calls Khadafy to laud settlement

US President George W. Bush telephoned Libya's Moammar Khadafy to express his satisfaction over a $1.5 billion payment that Tripoli made to settle a long-standing dispute over terror attacks, including the bombing of a Pan Am jetliner over Scotland, the White House said on Monday.

In their conversation, Bush and Khadafy "discussed that this agreement should help to bring a painful chapter in the history between our two countries closer to closure," White House spokesman Gordon Johndroe said in a statement.

Libya's Oct 31 payment cleared the last hurdle in restoration of full normalization of diplomatic relations between Washington and Tripoli. The money will go into a $1.8 billion fund that will pay $1.5 billion in claims for the 1988 Pan Am 103 bombing over Lockerbie, Scotland, and the 1986 bombing of a German discotheque. Another $300 million will go to Libyan victims of US airstrikes ordered in retaliation for the disco bombing, which killed two American soldiers.