It looks like Colonel Gadhafi, long the seemingly paranoid leader of a pariah nation, has come in from the desert cold, with the signing of a $170 million compensation deal with families of victims of a French passenger jet bombing 15 years ago.

Libya’s promise to pay represents another move by Moammar Gadhafi to shed his nation’s image as a rogue state. Last month, Libya renounced weapons of mass destruction and opened weapons productions facilities to international inspectors.

The compensation deal, following years of painstaking negotiations, was signed in Paris by the director of a foundation run by Gadhafi’s son and a negotiator for the families.

French Foreign Minister Dominique de Villepin hailed the agreement as opening a new diplomatic chapter between France and Libya.

“A new stage has begun,” de Villepin said at a news conference with his Libyan counterpart, Abdel-Rahman Shalqam. “We will have a deeper political dialogue in favor of peace and notably for the development of the African continent.”

The Sept. 19, 1989, bombing of an UTA airlines flight over Niger’s Tenere desert killed all 170 people aboard. Victims came from 17 countries, but France, with 54 dead, had the heaviest toll. Seven were from the United States, including the wife of a U.S. ambassador.

Applause broke out after the signing of papers to seal the private deal between the group of victims’ families and the Gadhafi International Association for Charitable Organizations, headed by Gadhafi’s son, Seif el-Islam.

“I’m certain this will open a new page in Libya’s foreign relations,” said Saleh Abdul Salam, the Gadhafi foundation’s director.

In seeking to remake his image, Gadhafi has condemned the Sept. 11, 2001, attacks, and there have even been recent reports of low-level diplomatic contacts between Libya and its sworn enemy, Israel.

Still, Gadhafi has a ways to go. He sulked through a Europe-North Africa summit in December, refusing to give an opening speech or clap after French President Jacques Chirac delivered closing remarks. Libya continues to be on the State Department’s list of terrorism sponsors.

Guillaume Denoix de Saint Marc, who represents the families, said they were “satisfied” with the accord. Not all details were disclosed in full.

“The Libyan government has finally recovered its honor,” said Denoix de Saint Marc, who lost his father in the bombing for which six Libyans including a brother-in-law of Gadhafi were convicted in absentia by a French court. They remain at large.

Abdul Salam, speaking with reporters, said Libya “is certain about the innocence of the six convicted Libyans.” He said the accord was “essentially done on a humanitarian basis.”

The victims’ families were expected to create a foundation to distribute the funds among themselves, but the cash is not expected to start flowing for six months. However, a check for $42.5 million was handed over Friday, Denoix de Saint Marc said.

A bank handling the funds transfer and SOS-Attentat, an advocacy group for terrorism victims, also signed the deal.

While the deal is private, France was in the wings overseeing developments. The agreement follows up on $33 million Libya paid in the case in 1999.

Grieving families sought increased compensation once Libya agreed to pay a far higher sum $2.7 billion to relatives of the 270 victims of the 1988 downing of a Pan Am jet over Lockerbie, Scotland.

In the Republic of Congo, which lost 49 people in the UTA bombing, a representative of victims’ families also expressed satisfaction with the deal. The bombed flight had taken off from Brazzaville, the capital, to Paris.

“Money cannot replace the relatives that we lost. But it is a gesture and welcome compensation,” said Gen. Norbert Dabira.

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