Nearly 20 years after the bombing of Pan Am Flight 103 over Lockerbie, Scotland, the United States and Libya have signed a compensation deal for the American victims, a crucial step on the road to restoring diplomatic relations between the two countries. Some family members of Flight 103 victims, however, are not thrilled to see the US is willing to reestablish ties with Libya while leader Moammar Gadhafi is still in charge.

"I am irritated and angry that our government is really willing to open up diplomatic relations while Gadhafi is still in power since he is responsible for the murders of American citizens," said Bert Ammerman, whose brother Tom was on board Flight 103.

"By agreeing to this the US is opening relations with a state that sponsors terrorism." Ammerman, who is a former president of Victims of Pan Am Flight 103, says he is in favor of ultimately restoring relations with Libya, just not while Gadhafi remains its leader.

Before this latest deal, Gadhafi had not completed settlement payments, stemming from a 2003 agreement, to the families of Flight 103 victims. Libya had agreed to pay $2.7 billion in compensation, or $10 million to each family of the 270 victims, but the final $2 million installment owed to each family has still not been paid. Libya was supposed to pay it when the US removed it from its list of states that sponsor terrorism in 2006.

Some family members say they'd rather keep Libya on notice than receive the financial settlement.

"I would gladly forego the money to have Libya remain on the state sponsored terrorism list, so long as Gadhafi's in power," said Peter Lowenstein whose son Alexander, a 21 year-old student at Syracuse, was on board Flight 103.

"I don't think we should be doing this in exchange for Libya getting a free ride," Lowenstein said.

As part of the latest deal, Libya will finish paying the compensation to the American families stemming from the 2003 settlement. New legislation signed by President Bush earlier this month grants Libya immunity from lawsuits once that compensation has been paid. Most family members of the victims have praised legislative attempts to create compensation funds, but some draw the line at warming relations with Libya.

There were 26 pending lawsuits filed by American citizens against Libya for the Flight 103 bombing and other attacks, a senior Libyan government official told the AP. The deal also settles three outstanding lawsuits filed by Libyans for the US airstrikes on Tripoli and Benghazi in 1986 that Libya says killed 41 people, according to the same official.

Senator Frank Lautenberg (D-NJ), who sponsored the recent legislation to compensate victims and grant Libya future immunity, says that while there is still work to be done, this deal does move the US and Libya closer to restoring full diplomatic relations.

"There are several more steps to this process until these families get the justice they deserve," said Sen. Lautenberg, "but with this agreement signed, Libya moves closer to a constructive relationship with the United States."

Meanwhile, victims' families are still closely watching the ongoing appeals case of the man convicted for the bombing of Flight 103. A former Libyan intelligence agent, Abdelbaset Ali Mohmed al-Megrahi, was granted an appeal last year by a Scottish judicial review panel. Al-Megrahi was convicted in 2001 and has since maintained his innocence.

Victims' families worry that if al-Megrahi's conviction is overturned, Libya can deny having any role in the bombing altogether. A ruling is expected by the end of this year.

Click Here for the Investigative Homepage.