Tripoli  - The United States has opened a trade office in Libya to boost bilateral economic relations, the official JANA news agency reported on Monday.

US assistant secretary for trade, Israel Hernandez, was at the official opening on Sunday with Libyan government representatives as well as businessmen from both countries, JANA said.

Hernandez explained that the move aims to increase trade exchange between the two countries, according to JANA

The opening of the trade office is seen by observers as yet another sign of warming relations between the two former arch-foes.

The move comes one month after a landmark visit to Libya by US Secretary of State Condoleezza Rice.

US and Libyan relations began warming in 2003 when Gaddafi agreed to give up weapons of mass destruction programmes and denounce terrorism.

The United States subsequently ended sanctions, removed oil-rich Libya from its terrorist blacklist and re-established diplomatic relations.

The groundwork for Rice's visit materialized after Libya agreed to provide hundreds of millions of dollars into a fund to compensate the families of those who died in the 1988 bombing of a Pan Am flight over Lockerbie, Scotland, and the two US soldiers killed in the 1986 bombing of a Berlin disco.

The US has already established a diplomatic presence in Libya, but has not yet named an ambassador.

The US Congress is suspending the appointment of an ambassador until all American victims of Libyan attacks have been compensated. (dpa)