The United States is resuming direct diplomatic ties with Libya even while exploring reports that Muammar al-Qaddafi (search) took part in a plot to assassinate Saudi Arabia's crown prince.

And the State Department also is advising Americans to be cautious if they go there. "Although Libya has curtailed its support for international terrorism, it may maintain residual contacts with some of its former terrorist clients," the department said in a travel warning.

Only a brief reference to the plot reports was contained in an announcement Monday in Tripoli by Assistant Secretary of State William J. Burns, after he held talks with al-Qaddafi.

Burns said only that he and J. Cofer Black, who heads the department's office of counterterrorism, had discussed with the Libyan leader "recent public allegations regarding Libya and Saudi Arabia."

At the State Department, spokesman Adam Ereli said, "I think we made clear our concerns about the story" concerning an alleged plot against Saudi Crown Prince Abdullah (search).

Burns's inauguration of a new U.S. liaison office in the Libyan capital came 24 years after the U.S. Embassy in Tripoli was closed. He said Libya would take steps to establish a diplomatic office in Washington.

"Both sides confirmed that these actions would assist the step-by-step process of strengthening relations as Libya fulfills each of its commitments and the U.S. continues to respond in kind," Burns said in a statement released also in Washington.

The Libyan official news agency JANA said Burns and Foreign Minister Abdel Rahman Shalqam had agreed on the parallel diplomatic moves.

They marked a continuing improvement in U.S. relations with the North African country following al-Qaddafi's promise last December to dismantle his chemical, biological and nuclear weapons programs.

Burns said the two sides "held detailed discussions on Libya's commitment to support the global war on terrorism, to repudiate the use of violence for political purposes and to implement its pledge to cease all support for terrorism."

Libya is one of seven nations annually branded as sponsors of terror by the department.

Burns, who heads the department's Near East bureau, gave no indication in his statement what al-Qaddafi may have said about the plot reports.

On other subjects, though, Burns said the U.S. delegation expressed appreciation for Libya's humanitarian assistance to civil war victims in Darfur, Sudan. He said the delegation also "recalled" Libya's decision to accept responsibility for the bombing of a Pan Am airliner over Lockerbie, Scotland, in 1988 that killed 270 people.

Libya agreed to pay $2.7 billion to the victims' families.

President Bush, speaking with reporters this month after the G-8 summit in Georgia, said U.S. investigators were looking into reports of a plot against the Saudi crown prince.

"When we find out the facts, we will deal with them accordingly," Bush said. "I have sent a message to him (al-Qaddafi) that if he honors his commitments to resist terror and to fully disclose and disarm his weapons programs, we will begin a process of normalization, which we have done. We will make sure he honors his commitment."

Secretary of State Colin Powell told a group of Arab reporters last week that the administration takes the reports seriously. "The Saudis are in touch with us and giving us information," he said.

Allegations of a plot against Abdullah were mentioned separately by Abduraham Alamoudi (search), an American Muslim leader jailed in Alexandria, Va., on federal charges of having illegal financial dealings with Libya, and by Col. Mohamed Ismael, a Libyan intelligence officer currently in Saudi custody.

Abdullah is Saudi Arabia's de facto ruler since King Fahd is gravely ill.

Ereli said Monday that if the reports of a plot proved true, "it would call into question continued development of relations with Libya."

Relations with Libya took a sudden lurch forward after al-Qaddafi started shipping parts of his weapons program to the United States. The Bush administration promoted that action as evidence of a success for U.S. foreign policy.

Bush moved in April to restore normal trade and investment ties with Libya, including the import of Libyan oil. However, Libya was not removed from the State Department's terrorism list.