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Obama, Gaddafi shake hands at G8 dinner

L’AQUILA, Italy (Reuters) - Libyan leader Muammar Gaddafi met his first U.S. president on Thursday, shaking hands with Barack Obama and sitting just one place away from him at a dinner for world leaders at a G8 summit in Italy.

U.S. President Barack Obama shakes hands with Libya's leader Muammar Gaddafi (L) before a dinner at the G8 summit in L'Aquila, Italy, July 9, 2009. REUTERS/Alessandro Bianchi

The two leaders were photographed greeting each other and television images later showed Obama and Gaddafi -- who wore ruby red- and gold-flecked robes and hat -- separated only by Italian Prime Minister Silvio Berlusconi at the dinner table.

Strained for many years over Libyan support for groups Washington considers terrorist, U.S.-Libyan ties have thawed in recent years. But there is still mistrust on both sides and relations are businesslike at best.

The United States and Libya resumed diplomatic ties in 2004 after a break lasting more than two decades. The United States designated Libya a “state sponsor of terrorism” in 1979, and President Ronald Reagan ordered Libyan assets in the United States frozen in January 1986.

Relations sank further when the United States blamed Libya for the deadly bombing of a Berlin disco frequented by U.S. military personnel. U.S. aircraft bombed Tripoli, Benghazi and Gaddafi’s home in April 1986, killing his adopted infant daughter.

Two years, later Libya was blamed for the bombing of Pan Am flight 103 over Scotland that killed 270 people. Libya eventually handed over two suspects to stand trial in the Netherlands.

In 2003, Libya reached a political agreement with the United States and Britain to accept responsibility for the Lockerbie bombing and agreed to pay about $2.7 billion in victims’ compensation.

Later that year, Libya announced it was abandoning its weapons of mass destruction programs. President George W. Bush formally ended a U.S. trade embargo against Tripoli in 2004, and Libya declared an end to confrontation with the United States in 2008.

Gaddafi, who President Reagan once called the “mad dog of the Middle East,” received the then-U.S. Secretary of State Condoleezza Rice in Libya last year and Bush spoke to him on the telephone.

The famously eccentric leader raised eyebrows earlier in the day when he hopped out of his white limousine for a 15-minute stroll on the highway from Rome to the summit site of L’Aquila, according to Italian news agencies.

This is Gaddafi’s second trip to Libya’s former colonial ruler Italy in a month. He arrived last month wearing the photo of a colonial-era Libyan resistance hero pinned to his chest.

The Libyan leader, who is at the G8 summit in his role as African Union chairman, is staying in a bedouin tent pitched on a soccer field in L’Aquila’s police barracks, just a few kilometres away from less-opulent tents for those left homeless by an April earthquake.