WASHINGTON (CNN) -- Secretary of State Condoleezza Rice will meet Tuesday with the son of Libyan leader Moammar Gadhafi to discuss deepening ties between Washington and Tripoli, senior State Department officials said Monday.
Saif al Islam Gadhafi has been credited with convincing his father to compensate victims of a 1988 bombing.
"It's a growing, evolving relationship," one senior official said, calling Saif al Islam Gadhafi "a significant political figure."
Al Islam Gadhafi, who has been mentioned as a possible successor to his father, is in the United States on a private visit.
Libyan activists have urged Rice not to meet with Gadhafi's son while in the U.S. until leading Libyan dissident Fathi Eljahmi is released from prison after seven years behind bars.
The Western-educated al Islam Gadhafi is widely credited with convincing his father to abandon his weapons of mass destruction program and compensate victims of the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, in order to forge better ties with the West.
In September he announced he was retiring from political life to push for political and economic reforms through his Gadhafi International Charity and Development Foundation, of which he is the chairman.
In an interview with CNN, he said it was time for Libya to embrace democracy and establish a parliament and a constitution.
His visit comes amid warming ties between the United States and Libya following an agreement between the two countries on a final settlement for the Lockerbie bombing.
President Bush called Moammar Gadhafi Monday to express his satisfaction that a settlement for the Flight 103 bombing has been fully implemented.
The State Department described the call as the first conversation on record between a U.S. president and the flamboyant Libyan leader.
A Libyan intelligence officer was convicted of masterminding the bombing, and Libya was obligated to pay $2.7 billion in compensation to the families of the 270 victims killed in the attack, or $10 million per family. At least 189 of the people on board were Americans.
"The two leaders discussed that this agreement should help to bring a painful chapter in the history between our two countries closer to closure," said National Security Council spokesman Gordon Johndroe.
"While we will always mourn the loss of life as a result of past terrorist activities, the settlement agreement is an important step in repairing the relationship between Libya and the United States," Johndroe said. "Libya has taken important steps on the road to normalizing its relations with the international community, beginning with its renunciation in 2003 of terrorism and weapons of mass destruction."
The agreement was fully implemented October 31.
The Bush administration lifted most U.S. sanctions against Libya in April 2004, opening the way for U.S. investments and commercial activities.
In September, Rice made a historic visit to Libya, where she met with Gadhafi -- the first visit by a secretary of state in 54 years.