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Libya court upholds death sentence on medics

(Adds U.S. State Department comment paragraph 8)

TRIPOLI, July 11 (Reuters) - Libya's Supreme Court upheld death sentences on Wednesday against six foreign medics for infecting Libyan children with HIV, but officials said they could win a reprieve next week.

Foreign Minister Mohammed Abdel-Rahman Shalgam said the government-controlled High Judicial Council, which has the power to commute the sentence or even pardon the five Bulgarian nurses and Palestinian doctor, will consider the case on Monday.

European Union and Bulgarian leaders expressed regret at the court ruling, the latest twist in a highly politicised trial, but said they remained confident. There have been lengthy efforts to secure a deal with families of the children.

"The court rejects the appeals of the defendants and confirms the death penalty," judge Fathi Dhan told a five-minute hearing. The six medics were not in court to hear his ruling.

The six medics were sentenced to death in December after being convicted of infecting 426 Libyan children with the deadly virus while they worked at the children's hospital in the city of Benghazi in the 1990s.

In jail since 1999, they say they are innocent and were tortured to make them confess. Some Western scientists say negligence and poor hospital hygiene were the real culprits and that the six were made into scapegoats.

Bulgarian President Georgi Parvanov said Wednesday's decision was no surprise. "We expect and insist for a swift solution by Libya's High Judicial Council to finally complete the case," he told reporters.

In Washington, State Department spokesman Sean McCormack said the medics should be "returned immediately", but noted that Wednesday's court ruling was not the last word in the process.

The case has blocked Libyan leader Muammar Gaddafi's efforts to deepen links to the West after ending decades of isolation in 2003 when Libya scrapped a prohibited weapons programme.

HOPES FOR DEAL

Hopes were raised for a deal to win their release on Tuesday evening when Libya's Gaddafi Foundation charity said it had reached an accord with the children's families that "puts an end to the crisis".

Libyan officials say the High Judicial Council would only agree to the release of the nurses if a settlement were reached in private talks between the families and the EU on funding for the children's medical care.

Behind the scenes talks have been taking place between the EU and the association of the families of the children on just such a possible deal -- to provide a fund of tens of millions of dollars for the families to pay for the children's future care.

Libya calls the cash "compensation" -- a term Bulgaria rejects as it says it implies the medics are guilty.

The Libyan families have asked for 10 million euros ($13.3 million) for each child, far in excess of what observers say the EU has been prepared to pay. The Gaddafi Foundation charity, run by a son of Libyan leader Muammar Gaddafi, Saif al-Islam, has been a central player in facilitating the talks.

Tsvetanka Siropoulu, sister-in-law of one of the nurses, said the case was always likely to be resolved out of court. "It was clear from the very beginning that this fabricated trial will not have a judicial solution but a political one," she said.

Bulgaria and its allies in Brussels and Washington have all been trying to win their release, and failure to free the nurses would carry a diplomatic cost for Libyan leader Muammar Gaddafi.

Libya expert Saad Djebbar, a London based Algerian lawyer, said the Gaddafi Foundation's announcement of a deal on the eve of the ruling was a signal from authorities to say: "Don't worry. The sentences will be commuted." (Additional reporting by Anna Mudeva and Kremena Miteva in Sofia, and by Sue Pleming in Washington)

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