David Welch, the assistant secretary of state for Near Eastern Affairs, told reporters that Libya placed in a US government account a "substantial amount" toward the 1.5 billion dollars promised to Washington.

The sum is to compensate US and other families for the 1988 bombing of a Pan Am flight over Lockerbie, Scotland, that killed 270 people, and for US families of a Berlin disco bombing that killed two Americans and hurt 50 others.

Welch, speaking in a telephone conference call with journalists, said he viewed the deposit by the Libyans overnight Wednesday "as evidence of their commitment to fully implementing the whole agreement."

On August 14, Libya and the United States signed a compensation deal in Tripoli for victims of Libyan attacks and Libyan victims of US reprisals, paving the way for full normalization of ties between the two countries.

The deal prompted a visit to Tripoli in September by Condoleezza Rice, who became the first US secretary of state to visit Libya in more than 50 years. Other diplomatic steps will follow.

Welch said the families of non-American victims of the Pan Am bombing are covered under the deal.

The humanitarian fund, which is based on "voluntary" contributions from firms and other sources, also sets aside a sum of 300 million dollars for Libyan victims of US attacks, Welch said.

After the disco bombing, Libya was subjected to several retaliatory US airstrikes on Tripoli and Benghazi on April 16, 1986, in which 41 people were killed, including an adopted daughter of Libyan leader Colonel Moamer Kadhafi.

Saying he did not want to stir "anxiety or infighting" among claimants, Welch declined to reveal the sum of money Libya deposited in the US account but compared it to a "low-risk mortgage downpayment."

A senior US official told reporters on the condition of anonymity that the US government cannot restore Libya's immunity to legal action in US courts until Tripoli pays the full agreed amount.

Nor can the US government begin distributing the funds to the victims and their families until the full sum is received, according to the official.

In Tripoli, the Libyan newspaper Oue, which is close to Kadhafi's influential son Seif al-Islam, reported that Libya has contributed 300 million dollars to the compensation fund.

The money came from donations from "brother countries, friends and companies," but not from the Libyan or US governments, the private newspaper added.

Welch said he understood that the Libyan government has approached Libyan, US, and international firms about receiving donations, but did not know if it had received any from these sources.

After being severed in 1981, US-Libyan relations were restored in early 2004 a few weeks after Libyan leader, Colonel Moamer Kadhafi, announced Tripoli was abandoning efforts to acquire weapons of mass destruction.

In 2006, the United States announced a full normalization of ties, dropping Libya from a State Department list of state sponsors of terrorism and raising diplomatic relations to the level of ambassadors.

However, a full normalization has not been implemented as the appointment of a US ambassador to Tripoli as well as approval of funds for a new embassy have been held up in the Senate.

© 2008 Agence France-Presse