Schroeder in Libya

German Chancellor Gerhard Schroeder, visiting Libya for the first time since the end of its international isolation, praised the reforms of Muammar Gaddafi and invited the Libyan leader to visit Germany.

Mr Schroeder is the first German chancellor to travel to Libya and his trip reflects the North African country's much improved international standing since Gaddafi vowed to renounce nuclear, chemical and biological weapons in December.

His visit follows Libya's agreement last month to pay $35 million in compensation to more than 160 victims of a Berlin night club bombing in 1986. Mr Schroeder said the changes in Libya had been impressive and extended an invitation to Gaddafi to come to Germany. No date was set for the visit, which German government sources said would take place "at an appropriate time".

Mr Schroeder was accompanied by business leaders from companies including Siemens AG and energy groups Wintershall and RWE Dea AG and the visit was aimed at cementing economic relations with Libya, a major oil supplier to Germany.

Like other European countries, including Italy and Britain, Germany is keen to secure a foothold in Libya as investment and business opportunities open up in the oil-rich country.

German government sources said Gaddafi had sought to encourage cooperation between the Arab world and Europe as a counterbalance to the United States but that Mr Schroeder had stressed that close relations with both the United States and Russia were vital to Germany.

The German chancellor was due to leave for Algeria later yesterday at the end of his visit to Libya, which was to conclude with a trip to an oil site of BASF unit Wintershall.