Despite suspicions in Saudi Arabia that Libyan agents plotted to try to assassinate the kingdom's ruler, the Bush administration told Congress Wednesday it plans to establish full relations with the once outcast government of Moammar al-Qadhafi (search) by the end of the year.

The U.S. ambassador will be sent to Tripoli (search) and the 19 American diplomats working out of a hotel in the Libyan capital will move into a temporary facility by the winter, acting Undersecretary of State William J. Burns (search) told the House International Relations Committee.

The administration will ask Congress for funds for a new embassy compound in its 2007 budget request with the opening envisioned in late 2009, Burns said.

The upgrading of relations is based largely on Gadhafi's decision to give up Libya's pursuit of nuclear weapons and the settlement with the families of the victims of the 1988 Pan Am 103 (search) bombing, in which 270 people, most of them Americans, died.

President Bush has used Libya's renunciation of weapons of mass destruction (search) as a model that other countries should emulate.

Burns told the committee that Libyan disclosures helped enhance understanding of the global black market in the world's most dangerous technologies. He testified Libya promised the United States in December 2003 not to use violence for political purposes, and that he was not aware of "any evidence" Libya had broken its pledge.

However, Saudi Arabia strongly suspects a Libyan plot to assassinate Crown Prince Abdullah (search) in late 2003, and plans a public trial of 13 suspects, eight of them Saudis and five Libyans. Abdullah has ruled the oil rich kingdom since 1996 after his half brother, King Fahd (search), was disabled by a stroke.

Meanwhile, the State Department has listed Libya as a state sponsor of terrorism since 1979 and maintained some sanctions while lifting others after Gadhafi publicly renounced terrorism and agreed to compensate families of the Pan Am 103 victims.

"Today, weapons of mass destruction no longer pose a threat to the normalization of U.S.-Libyan relations," Burns said.

Establishing full relations will give the United States more of an opportunity to promote human rights in the North African country, he said.

The committee chairman, Rep. Henry Hyde, R-Ill., said he believed it was crucial to reward Libya for ending its weapons programs. But, he said, "the situation is not simple."

"While it has done the right thing on weapons of mass destruction, it may continue to support terrorism," Hyde said.

And, he said, "Libya continues to be one of the world's most oppressive regimes."

The senior Democrat on the committee, Tom Lantos of California, said, however, "it is time now to turn the page" and upgrade U.S. relations, likening the changes in Tripoli to Germany and Japan after World War II.