Libya makes final payment to terror victims

WASHINGTON (CNN) - Libya has paid $1.5 billion to the families of terror victims, ending the remaining roadblock to full relations with the United States, the State Department said Friday.

The payment ends Tripoli's legal liability from U.S. terror cases and paves the way for increased U.S. involvement in the oil-rich nation. President Bush Friday signed an executive order restoring Libyan immunity from terror-related lawsuits and dismissing pending cases over compensation as part of a deal reached this summer.

"The removes the last obstacle to a normal relationship between the United States and Libya," said David Welch, the top U.S. diplomat for the Middle East, who negotiated the agreement. He called Libya's rehabilitation from a terrorist nation to a U.S. ally "historic."