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DEAL SEEKS TRIAL OF SUSPECTS IN PAN AM BLAST

The United States and Britain have agreed to allow two Libyans charged in the 1988 bombing of Pan Am Flight 103 over Scotland to be tried by a Scottish court in the Netherlands, Secretary of State Madeleine K. Albright said today.

Albright challenged Libya to accept the offer and described it as a "take it or leave it proposition" for the Libyans.

In London, British Foreign Secretary Robin Cook urged Libya to cooperate "quickly and without equivocation," and asked U.N. Secretary-General Kofi Annan to inform Libya of the agreement and seek arrangements for the transfer of the two accused men -- Abdel Basset Ali Megrahi and Lamen Khalifa Fhimah -- allegedly Libyan intelligence agents.

U.S. officials said U.N. sanctions against Libya would be suspended once the two Libyans are delivered to the Netherlands. The sanctions include an air embargo, arms sales and certain financial and travel restrictions.

Unilateral sanctions imposed by the United States would remain in effect. Those sanctions cover virtually every aspect of U.S.-Libyan relations.

The Pan Am bombing killed all 259 passengers and crew, and 11 people on the ground in Lockerbie, Scotland. Among the dead were 189 Americans. At the time of the 1991 indictment on the two defendants, the State Department said the midair bombing was "a Libyan government operation from start to finish."

Albright told reporters that the step "is fully consistent with U.N. Security Council resolutions, and has been suggested to us as a way to call the Libyan government's bluff and to bring the fugitives into court at long last.

"After consultations with the Netherlands, we have concluded that such a trial is indeed possible. Accordingly, we have decided to go forward with the trial of the two suspects before a Scottish court, with Scottish judges applying Scottish law," she said.

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