The European Union (search) on Monday ended 12 years of sanctions against Libya (search) and eased an arms embargo to reward the North African country for giving up plans to develop weapons of mass destruction.

The decision by the EU foreign ministers brought the 25-nation bloc in line with a U.N. decision last year and reflected a significant warming of relations in recent months.

"This is a turning point in relations with Libya," French European Affairs Minister Claudie Haignere said.

The U.N. sanctions were imposed in 1992 to force Tripoli to hand over two Libyans indicted for the 1988 bombing of an American airliner over the Scottish town of Lockerbie (search). A year later, they were expanded to include a freeze on Libyan assets in foreign bank accounts and a ban on buying oil equipment.

The Security Council suspended the sanctions after the two Lockerbie suspects were delivered for trial in 1999, and abolished them last year after Libya agreed to compensate the families of the Lockerbie victims as well as those of the 1989 bombing of a French airliner over Niger.

The EU, like the United States, wants to improve relations with Libya now that Tripoli has scrapped its program to develop weapons of mass destruction.

Britain was pushing for a complete normalization of relations between the 25-nation EU and Libya and a full lifting of a separate arms embargo, according to a senior British official in London.

But friction remains over a Libyan court's conviction of five Bulgarian nurses and a Palestinian doctor accused of deliberately infecting more than 400 Libyan children with the AIDS virus. They were sentenced to death in May after allegedly infecting the children as part of an experiment to find a cure for AIDS.

Human rights groups allege Libya concocted the experiment story to hide unsafe practices in its hospitals and clinics. Bulgaria has close ties with the EU and is to become a full member in 2007.

"We are very concerned about the situation of the Bulgarian citizens," said Spanish Foreign Minister Miguel Angel Moratinos. He said the EU wants that court ruling to be reversed.

The Europeans are eager to invest in Libya's substantial oil reserves and obtain its cooperation in stopping the flow of illegal immigrants into Europe.

Separately, the foreign ministers approved an Italian request to ease the EU's own arms embargo imposed on Libya in 1986. This will enable Libya to buy high-tech equipment to prevent the flow of illegal African migrants through Libya into Europe.

An EU "technical mission" will likely visit Libya in November to assess Libya's need for equipment to monitor illegal migration.

Italy wants to sell equipment such as night-vision binoculars and helicopters, but has not been able to do so because of the arms embargo.

The United States lifted most of its commercial sanctions in April after Libyan leader Moammar Gadhafi abandoned his banned weapons programs.

As a sign of warming relations, Gadhafi went to the EU's Brussels headquarters in April on his first trip outside the Mideast or Africa in 15 years.

European Commission President Romano Prodi has visited Libya several times to meet Gadhafi to discuss ways for Libya to sign up to an EU aid and trade pact it has with North African and Middle Eastern nations.

To join up to that pact, Libya will have to sign declarations renouncing terrorism as well as committing to implement democratic reforms and respect human rights.

Also Monday, Gadhafi received a delegation of Italian Jews for talks on possible compensation of Libyan Jews expelled after the 1967 Middle East war, a representative of one of Gadhafi's sons said.

It was believed to be the first meeting in Libya with representatives of the 6,000 Libyan Jews who fled an anti-Jewish backlash following Israel's victory.

Saadi Gadhafi, a professional soccer player in Italy, played a key role in setting up the meeting, according to Nicola Ravarini from a Milan public relations firm representing the son. In Libya, officials did not comment.

Three weeks ago, the elder Gadhafi for the first time spoke about the possibility of compensation. "We have to separate between the Jews and Zionism, therefore the Jews who were in Libya and whose properties were unjustly confiscated should be compensated ... but those Jews who seized properties from Palestinians in Israel do not deserve compensation," he said.