DATE=8/26/98 TYPE=CORRESPONDENT REPORT NUMBER=2-237699 TITLE=U-N / LIBYA LOCKERBIE RESPONSE (L) BYLINE=MAX RUSTON DATELINE=UNITED NATIONS CONTENT= VOICED AT: INTRO: LIBYA SAYS IT NEEDS MORE TIME TO CONSIDER A PROPOSAL IT HAND OVER TO THE NETHERLANDS TWO LIBYANS ACCUSED OF BOMBING A U-S AIRLINER OVER SCOTLAND IN 1988. U-N CORRESPONDENT MAX RUSTON REPORTS. TEXT: IN A LETTER TO THE THE PRESIDENT OF THE SECURITY COUNCIL, LIBYA SAYS ITS JUDICIAL AUTHORITIES NEED TIME TO STUDY THE PROPOSAL, WHICH WAS INCLUDED IN A DRAFT RESOLUTION SUBMITTED TO THE COUNCIL TUESDAY. THE DRAFT RESOLUTION SAYS SANCTIONS AGAINST LIBYA WILL BE LIFTED IF, AMONG OTHER THINGS, LIBYA HANDS OVER TO THE NETHERLANDS TWO MEN ACCUSED OF BOMBING A PAN AMERICAN AIRLINER OVER SCOTLAND 10-YEARS AGO. THE TWO MEN WOULD BE TRIED UNDER SCOTTISH LAW. LIBYA IS ASKING THE SECURITY COUNCIL TO POSTPONE ITS DECISION ON THE DRAFT RESOLUTION UNTIL LIBYAN AUTHORITIES HAVE COMPLETED THEIR STUDY OF THE DOCUMENTS. THE LETTER SAYS LIBYA IS ANXIOUS TO ARRIVE AT A SETTLEMENT OF THE DISPUTE, BUT DOES NOT SPECIFY HOW MUCH TIME IS NEEDED OR WHETHER IT IS LIKELY TO AGREE TO THE TERMS OF THE PROPOSAL. DIPLOMATS SAY LIBYA'S REQUEST COULD RESULT IN A SIGNIFICANT DELAY, AS LIBYA NOTES IT TOOK SEVERAL MONTHS FOR BRITAIN AND THE UNITED STATES TO PREPARE THE DRAFT RESOLUTION. U-S OFFICIALS SAY THE DRAFT RESOLUTION IS IN LINE WITH LIBYAN PROPOSALS ON THE ISSUE. LIBYA HAS REFUSED TO HAND THE TWO SUSPECTS OVER TO THE UNITED STATES OR SCOTLAND FOR TRIAL. IT HAS SAID IT WILL AGREE TO A TRIAL IN A NEUTRAL COUNTRY. THE PROPOSAL FROM BRITAIN AND THE UNITED STATES FOLLOWS INCREASED CALLS FROM LIBYA FOR THE LIFTING OF SANCTIONS IMPOSED IN 1992. U-N SECRETARY-GENERAL KOFI ANNAN HAS BEEN WORKING TO ACHIEVE A COMPROMISE SETTLEMENT BETWEEN THE COUNTRIES INVOLVED IN THE DISPUTE. U-S OFFICIALS SAY THEY WILL CONSIDER CALLING FOR AN EXPANSION OF SANCTIONS AGAINST LIBYA IF IT DOES NOT AGREE TO THE TERMS OF THE DRAFT RESOLUTION. (SIGNED) NEB/UN/MPR/LSF/RAE 26-Aug-98 12:25 PM EDT (1625 UTC) NNNN Source: Voice of America .