TRIPOLI, Libya -- Setting aside decades of acrimony over Tripoli's sponsorship of terrorism, British Prime Minister Tony Blair chatted cordially with Moammar Gadhafi on Thursday and said the Libyan leader could be an important partner in the war on terror. Without giving details, Blair said Britain would offer a "new military relationship" to a country long considered a pariah and that once armed Britain's foe, the Irish Republican Army. Blair became the first British leader to visit Libya since Prime Minister Winston Churchill was there in 1943 during World War II. He also was the first British prime minister to meet with Gadhafi since the Libyan seized power 35 years ago.
Business interests, meanwhile, were running ahead of the diplomats.
During the visit, Blair said BAE Systems, a British defense manufacturer, would announce a major deal in Libya shortly. And Royal Dutch/Shell Group said Thursday it had signed a preliminary agreement with Libya to develop gas resources in the North African nation. A Blair spokesman said the deal was worth $200 million and potentially as much as $1 billion.
Blair aides said Libya could expect cooperation with its defense needs and Britain would, in time, push for an European Union arms embargo to be lifted. Libyan officers may be invited to train in Britain, as Gadhafi did as a junior army officer in 1966.
The two men smiled and shook hands then settled into low chairs inside Gadhafi's tent in the desert. It was hung with tapestries of camels and palm trees. Outside, a herd of camels wandered nearby.
After their 90-minute meeting, Blair praised Libya's progress in dismantling its chemical, nuclear and biological programs and said it "gives us real hope we can build a new relationship with it for the modern world."
Blair said Libya's December deal with the United States and London to dismantle its weapons of mass destruction ensured 'we have a more secure world."
"We are showing by our engagement with Libya that it is possible for countries in the Arab world to work with the United States and the United Kingdom to defeat a common enemy of extremist fanatical terrorism driven by al-Qaida," Blair told reporters.
Britain has a history of grievances with Gadhafi, who supplied shiploads of weapons to the IRA in the 1980s. It broke diplomatic relations with Libya in 1984 after British policewoman Yvonne Fletcher was killed by a shot fired from a window of the Libyan embassy, or "people's bureau," in London.
Relations hit bottom after Libya was implicated in the 1988 bombing of a Pam Am jetliner over Lockerbie, Scotland, that killed 270 people.
But the two countries restored diplomatic ties in 1999 after Libya accepted responsibility for Fletcher's shooting, apologized and agreed to pay her family compensation. Blair said British detectives would visit Libya on April 3 as part of the investigation into Fletcher's death. No one has been charged with her killing.
Gadhafi's government also took responsibility for the Lockerbie bombing and agreed to compensate relatives of victims, a move that resulted in the lifting of U.N. sanctions against Libya.
Now, Britain has taken the diplomatic lead in ending Libya's international isolation. The visit marked a major step back into the international mainstream for the North African state.
Blair announced the appointment of Maj. Gen. Robin Vincent Searby, 56, as defense coordinator for Libya. Without giving details, Blair said Britain "will offer Libya a chance of a new military relationship with the UK."
Some in Britain have criticized strengthening ties, but Blair said countries that cooperate with the international community should be welcomed back into the fold.
"I was particularly struck by Col. Gadhafi's ... recognition that Libya's own future is best secured by a new relationship with the outside world and of a common cause with us in the fight against al-Qaida extremism and terrorism, which threatens not just the West but Arab nations, too," Blair said.
Gadhafi didn't speak with reporters after the meeting, but his foreign minister, Abdel-Rahman Shalqam, said Libya and Britain have important roles to play in Africa: "We have the same obligations."
Shalqam said Libya had warned of the dangers of al-Qaida in the 1980s and 1990s "when Europe and even America were supporting these people." He was referring to Western support of Islamic fighters who'd gone to Afghanistan to battle the Soviet occupation.
"For us, they (al-Qaida terrorists) are the real obstacle against our progress," Shalqam said. "They are against our security. They are against women. They are against the new culture. They are against political moderation, against any change in the region."
Libya's relations also have improved with the United States. In the highest-level meeting in decades, a U.S. envoy this week gave Gadhafi a letter from President Bush commending Libya's progress in eliminating weapons of mass destruction.
However, Washington remains more skeptical than London about Libya's progress. U.S. officials say Libya must further improve its human rights record and end support for terrorism before Washington restores diplomatic relations and removes wide-ranging sanctions.