Official: Libya to get French missiles

( AP ) - A Libyan official said Thursday that Moammar Gadhafi's long-isolated country has signed contracts worth $405 million with French companies for missiles and communications equipment.

A spokesman for French President Nicolas Sarkozy would not confirm the deal but said there appeared to be one. French officials denied that any deal to sell military equipment was in exchange for Libya's releasing six imprisoned medics last month.

The first contract, worth $230 million, is for Milan missiles, and the second, totaling $175 million, is for advanced Tetra communications and surveillance equipment for the police, said the Libyan official, speaking on condition of anonymity because he was not authorized to speak to the press. He did not reveal the names of the French companies.

The official said the deal is important because it is the first of its kind that Libya has signed with a Western country since sanctions were imposed in the early 1990s.

In 2003, Gadhafi announced he was dismantling his nuclear weapons program, and the U.S. and Europe lifted sanctions. That same year, Libya accepted responsibility for the Lockerbie bombing, which killed 270 people, and agreed to pay restitution to the victims' families.

David Martinon, spokesman for Sarkozy, refused to confirm the contracts during an appearance late Thursday evening on France's LCI television.

"I do not confirm," Martinon said. But he added, "I imagine it to be true." The spokesman did not give the names of the French companies involved, but suggested one was the European Aeronautic Defence and Space Co.

"It is not my job to speak about the commercial dealings of a company like EADS, which appears to have concluded this deal," he said.

Martinon insisted that no arms contract was signed during Sarkozy's visit to Tripoli last week, the day after the release of the five Bulgarian nurses and a Palestinian doctor. He said there was "no compensation of that sort by France" for the release of the medics, who had been imprisoned 8 1/2 years for allegedly infecting Libyan children with the AIDS virus.

Libya allowed the medics to leave for Bulgaria on July 24 on the French presidential plane in the company of first lady Cecilia Sarkozy - on her second visit to Libya - and a European Union official.

The French president flew to Libya a day later to normalize relations with the one-time rogue state, now looking to rejoin the international community and erase its profile as an official sponsor of terrorism.

Sarkozy announced an initial agreement to sell Libya a nuclear-powered plant, saying the civilian nuclear technology would be used to desalinate sea water.

Under a deal sealed by the medics' release, the European Union agreed to an aid package and the prospect of increased trade ties. The Europeans also said they would encourage contributions to a Libyan fund set up to compensate families of the infected children.

There had been reports Wednesday of a military deal between France and Libya.

Gadhafi's son, Seif al-Islam Gadhafi, told the French daily Le Monde that a deal had been concluded involving the sale of French Milan anti-tank missiles for an estimated $137 million, as well as a deal on the joint Franco-Libyan manufacture of military equipment.

He also spoke of an agreement to conduct joint military exercises, adding this would be Libya's first military deal with a Western nation, according to Le Monde.

Earlier Thursday, French Foreign Minister Bernard Kouchner also denied that France has made a deal with Libya to sell military hardware in partial exchange for the six medics.

"There was no accord, there was no compensation, no money and no specific accord on any arms," Kouchner said.

Kouchner conceded, however, that in any lengthy negotiations like those that led to the release of the six medics, it is "obvious" that "there is a slightly hidden aspect." He did not elaborate.

Also Thursday, Bulgaria's government said it wants to write off Libya's $57 million debt to Bulgaria and transfer the outstanding obligation to the internationally administered fund.

"With these funds, Bulgaria aims to help Libya in its efforts to modernize its medical infrastructure, to contribute to the treatment of the HIV-infected children and to financial aid to their families," the government press office said.

The six medics were serving life sentences in a Libyan prison after they were convicted of deliberately infecting more than 400 Libyan children with HIV in a hospital in Benghazi. Fifty of the children died.

The six had been imprisoned for more than eight years when Libya agreed last month, under intense international pressure, to transfer them to serve out their sentences in Bulgaria. Upon their arrival in Bulgaria, the president immediately pardoned and freed them. Libya protested against their release.

The medical workers denied infecting the children and said their confessions were extracted under torture. The charges were widely denounced abroad as false.

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