Monday, July 21, 2003 Posted: 5:28 PM EDT (2128 GMT)

Saif al-eslam Gadhafi

GADHAFI: Because I'm a Libyan citizen, I would like to send this message to the American people and the American government that we, the Libyan people, we want to have a more constructive and fruitful relationship with the Americans. We want to see Americans visit Libya. We want to go there to study at American universities. We want to invest in the New York Stock Exchange. We want to have Pepsi Cola, Coca-Cola. We don't want confrontation and aggression and, you know, to fight anymore. It's over. It's behind us now. It's dead with the Cold War.

WOODRUFF: And yet, there is clearly a major unresolved issue, and that is the resolution of the Pan Am 103 bombing over Lockerbie, Scotland, back in 1988. There have been negotiations over this. At this point, your government is on the verge, we're told, of agreeing to release $2.7 billion to the families of those victims, but the money hasn't been released yet. When will it be?

GADHAFI: As far as we know that first of all, we regard ourselves innocent, and we had nothing to do with that tragedy. But because Libya is a responsible state and we abide by our commitment -- and we are certainly committed to our obligations -- that we have to accept the outcome of the trial. Therefore, now we are following this, and we are committed, and we are going to pay the compensation.

And as far as I know that there was a recent meeting here in London between the Libyan business community and American lawyers, who represent the families of the victims, and they solved all of the technical issues regarding the compensation deal. And I think pretty soon they are going to deposit the money and just to make it ... just part of the history.

WOODRUFF: Do you know when the money will be released?

GADHAFI: I don't know exactly, but I think in a few weeks, as far as I know.

WOODRUFF: And the families can take your word for that?

GADHAFI: I think so. And the families, they sent their lawyers, as I said, they met our people here, and they agreed on all of the details of an escrow account, of the money, of everything. And I think we had a very transparent and clear negotiation with the lawyers, and everything is settled. And we will wait to deposit the money.

WOODRUFF: You say, though, that your government is innocent of this, and yet there was a trial, there was a Libyan man, a man of Libyan descent, who was found guilty. It is widely believed there was a connection with your government. And you are going to be expected, your government, to take responsibility. Is that going to happen?

GADHAFI: Yes, this is just to fulfill our obligation. The Security Council resolution that we have to accept responsibility, not to admit responsibility, and it's a very technical issue and legal issue. But this is part of our commitment regarding the Lockerbie fine. But, in fact, we regard ourselves as innocent, and we had nothing to do with that. And even the case against our citizen was very weak, and there was no concrete evidence against people. But because, as I said, we are a responsible state, we have to abide by our word and agreement and commitment, and therefore we accepted the results of the trial, although we think it was unfair.

WOODRUFF: But you're saying your government will say this, it will accept responsibility.

GADHAFI: Yes, of course, yes.

WOODRUFF: There is another issue that has come up in all of this. The United States is asking Libya to prove that it has no weapons of mass destruction. This comes particularly right after a report that not very long ago Libya accepted weapons technology from Russia. What do you know of this?

GADHAFI: Really, the truth is I'm not an expert in this field and have not enough information about this. But as far as I know that we want to spend our money to modernize our economy and to modernize our infrastructure and to build civilian projects and not to acquire WMD. And I think we don't have the capability, but technical capability and the manpower to develop such a sophisticated arsenal.

And plus, Libya recently has signed all of the relevant conventions regarding the WMD, and now we are members of those conventions. And because we are members, we have to be subject to international inspections and we have to be subject to other procedures regarding transparency. And therefore, I think we are on the right track, and now we are a member of those international conventions, and I think they are enough and good steps.

WOODRUFF: What do you expect from the United States in return?

GADHAFI: I think we know exactly the concerns of the Americans, and they know, of course, our concerns. And now we have -- really, I am very happy that we have a direct face-to-face dialogue. We have a very constructive negotiation, and we are meeting each other as friends. And we are trying to solve our problems in a very constructive way, and we are working hard to get a mutual beneficial outcome for both sides. And now we are not enemies anymore. We are not in confrontation. We are not fighting each other now. Just are sitting around the table as friends, and we are discussing our concerns.

And I think the only thing I have to say you now, we have to go on with this dialogue, and I'm sure we are going to reach a very mutual beneficial outcome for both of us. And I think me personally, I'm very happy with the negotiations with the Americans.