The United States ignored on Friday a warning by Libyan officials that they will stop paying compensation to families of Pan Am 103 (search) victims unless Washington lifts sanctions against Libya by May.

State Department spokesman Adam Ereli (search) said the United States will discuss relations with Libya only after that country has eliminated its deadliest weapons programs and renounced terrorism.

Libya agreed last year to pay $2.7 billion in compensation to families of the 270 victims who died in the Pan Am 103 bombing on Dec. 21, 1988.

The families have received initial payments. In a reported published Friday, however, Libyan Prime Minister Shukri Ghanim (search) told The New York Times that his country will withhold future payments if the Bush administration does not quickly reward Libya for its promises to abandon its secret weapons programs.

The State Department's Ereli said U.S. policy "is based on Libyan actions and what steps Libya takes to follow through on its commitments."

He said the compensation agreement resulted from negotiations between Libyan officials and lawyers for the Pan Am 103 families. Because the U.S. government was not a party to the discussions, Ereli told reporters, questions about compensation should be directed to the Libyan government and the Pan Am 103 families.

Glenn Johnson, chairman of the Victims of Pan Am Flight 103 (search), which represents about 150 families, said it's up to Libya to meet the conditions for lifting the sanctions by dismantling weapons of mass destruction, including nuclear, chemical and biological, and admitting inspectors.

"They haven't dismantled," he said. "They say they're willing to and going to, but I don't think anyone wants to lift sanctions because they say they're going to do it."

Susan Cohen, mother of a Pan Am 103 victim, said that, given the choice between lifting sanctions by May and a cutoff of compensation payments, she would prefer the latter.

She said she has no faith that Libyan leader Muammar al-Qaddafi (search) is sincere about giving up doomsday weapons for good.

President Bush said he saw al-Qaddafi's pledge on Dec. 19 to surrender his weapons programs as a victory for his policy of forcefully confronting unfriendly states. He expressed hope other states will follow suit.

Current sanctions include a ban on U.S. oil company operations in Libya and on most use of U.S. passports to travel there. Additional economic sanctions are in place as a result of Libya's membership on the State Department's list of state sponsors of terrorism.