In 2003, the United States held up Libya as an example of a rehabilitated rogue state after Tripoli renounced terrorism and scrapped its weapons of mass destruction programs. But attempts to forge closer bonds between the United States and Libya have stalled. As VOA correspondent Gary Thomas reports, the Libyan government is annoyed that its new behavior has not yielded more tangible rewards from Washington.

Libya's re-entry into the good graces of the West in 2003 was hailed by the United States as a foreign policy success story. Analysts say Washington was pointedly trying to show countries like Iran and North Korea that good things can happen to a country that gives up ambitions to get weapons of mass destruction and stops backing terrorism.

But, as Libyan ambassador to the United States Ali Aujali tells VOA, his country is still waiting for its tangible thank-yous from Washington.

"I think Libya is entitled, Libya deserves, better attention from the United States for what it did if we are really concerned about the proliferation about the weapons of mass destruction…The United States did not reward Libya for what it did. Libya did not get the reward that we were supposed to get," he said.

Diplomatic relations between Washington and Tripoli were resumed in 2006, and Secretary of State Condoleezza Rice promised last August that she would visit Tripoli. But ties remain in a state of suspended animation in large part, analysts say, because of concerns in Congress about human rights and delayed final compensation to the families of victims of past Libyan-sponsored acts of terrorism.

Libya has been accused of involvement in several terrorist attacks, including the 1988 bombing of Pan Am flight 103 that killed 270 people.

Secretary Rice says she still wants to press ahead with a trip to Libya, but no visit has yet been announced. She also says she realizes that Libya would like some recognition for having changed its behavior.

"I still expect that I will go to Libya," she said. "I expect that we'll continue to have to talk about difficult things: human rights, terrorism. We're looking at the Lautenberg Amendment and its effect and what can be done, but obviously, when you have a major strategic shift of the kind that Libya has made, you want there to be some affirmation of the importance of having done that."

The amendment she refers to is an attachment tacked on to an Iraq war spending bill by Democratic Senator Frank Lautenberg. The bill, signed into law by President Bush in January, allows victims of terrorism to collect damages from the governments responsible by having their assets frozen.

David Goldwyn of the U.S.-Libya Business Association, which is dedicated to promoting trade between the two countries, says the law not only is irritating the Libyan government, but is scaring off potential Libyan investment in the United States.

"They have in a sense legislated capital flight of Libyan capital from the United States to avoid this legislation. So it's understandable, but not effective. And I think we can only hope that we can reason with the Congress, and that the administration will step up and try to save, I think, its most significant foreign policy accomplishment of the past eight years," he said.

Congress is also holding up confirmation hearings for a U.S. ambassador to Libya and, until recently, also refused to fund a new U.S. embassy in Tripoli.

Many analysts believe that smoothing ties with Libya is just not a top priority of the Bush administration in its waning days. David Mack, former Deputy Assistant Secretary of State for Near Eastern Affairs, says the administration simply has too many other, more urgent matters to deal with in the region, and does not think the Libyan relationship is worth a fight with Congress.

"The Bush administration no longer has the kind of muscle in foreign relations in dealing with Congress that it used to. And so they have to pick their issues. And right now, the Iraq war and to a certain extent the Afghanistan war, relations with Iran, and the Israeli-Palestinian issue, have crowded pretty much everything else out of the Middle East agenda for the Bush administration," he said.

David Schenker, director of Arab Politics Program at the Washington Institute for Near East studies, says Libya does not deserve preferential treatment anyway because it has not, as he sees it, changed its ways, particularly with regard to compensating victims of its terrorism.

"State sponsors of terrorism who are developing weapons of mass destruction, authoritarian governments, don't always abide by their agreements and certainly don't look after to the spirit of the agreement. I think the problem was that we were so pleased in this policy success that we declared victory way too early," he said.

A foundation led by the influential elder son of Libyan leader Muammar Gadhafi said recently that authorities are planning to release some of the jailed members of an al-Qaida-affiliated Islamist group accused of trying to overthrow the government.

Lisa Anderson, a professor of international relations at Columbia University and a leading expert on Libya, believes the move is part of Libya's attempt to pressure Washington get the dormant relationship back on track.

"I do think that this announcement that the Libyans are going to be releasing some of the people that they have jailed is designed to really sort of call the bluff of the Bush administration about the war on terror," she said.

But as Washington dawdles, Europe is acting. On Wednesday the European Commission proposed opening talks with Libya aimed at strengthening economic and political ties between Libya and the European Union.