U.N. officials have tried to dampen hopes that Secretary-General Kofi Annan’s visit to Libya Saturday can yield a diplomatic breakthrough on having the two suspects of the 1988 Lockerbie bombing tried.

Nevertheless, diplomats here and in Libya alike clearly hope that the U.N. chief can end several months of haggling in which Britain and the United States have offered a trial for the two Libyan suspects in the Netherlands, while Libya has sought assurances of their safety.

“I will try to settle this problem for once and for all,” Annan said in Tunisia before heading for Libya for discussions with the country’s leader, Col. Muammar Qaddafi. Annan declined to say what he would discuss, while several U.N. officials asserted Friday that he would not conduct any negotiations.

The U.N. Security Council, which monitors compliance with a travel ban on Libya, granted the secretary-general an exemption for the weekend visit.

The proposal that the U.S. and British governments gave Tripoli is one that neither one is prepared to alter. It demands that Tripoli hand over two Libyans, Abdul Basset al-Megrahi and Lamin Khalifa Fhimah, to the Netherlands for a trial to determine whether they were involved in the 1988 bombing of Pan American flight 103 over Lockerbie, Scotland. The attack killed 270 people.

In recent years, Libya had suggested that the two men be tried outside Britain or the United States, and had even affirmed that it was willing to turn the suspects over for trial to the International Court of Justice in The Hague.

Libya has accepted the U.S.-British proposal in principle and has said it merely wants a few clarifications of what it entails. But it has objected to the proposed venue of the trial – a Dutch military base rather than The Hague – and is also suspicious of other conditions.

Two months ago, Libyan Ambassador Abuzed Dorda demanded clarifications to the U.S.-British proposal, calling it “honey with a dose of poison in it”. In particular, Dorda argued, the suspects, if found guilty, should be returned to Libya to serve prison sentences – not to Britain or the United States.

Libya’s complaints, however, have led U.S. and British officials to counter that Tripoli is not serious about a trial. As long as Libya does not hand over the suspects, it cannot win the lifting of sanctions, in place since 1992, that cut off all direct air travel to or from Libya and restrict the sale of oil- producting machinery.

Peter Burleigh, U.S. ambassador to the United Nations, also warned that if Libya was stalling on the question of a trial, Washington might seek to toughen sanctions against the African nation within the Security Council.

Annan’s visit thus comes at a time when both sides are feeling frustrated, and may be looking for a face-saving way to end the long-running dispute. Libya and its allies are weary of sanctions, with several African and Arab nations openly urging an end to the U.N. embargo. South African President Nelson Mandela, in a series of visits this fall, tried to broker a deal that would both end the sanctions and allow a trial.

At the same time, the British families of the Lockerbie victims have moved toward accepting the trial proposal – although a more hardline U.S. families’ group remains wary of any solution short of a U.S. or British trial and imprisonment in either country.

The current proposal is already a strange compromise, in which a Scottish judge and Scottish laws would be applied to the conduct of the trial in the Netherlands following special legal agreements by the governments involved. Now, Annan’s task is to sell the proposal to the mercurial Qaddafi.

News reports out of Libya have not been especially encouraging, with some accounts by Libya’s JANA news service this week suggesting that Qaddafi – Libya’s sole ruler since 1969 – is not empowered to make a decision on the suspects’ fate.

However, a statement released by JANA said that “Libya has expressed its willingness to enter into negotiations with the concerned parties either directly or through the U.N. secretary- general.”

Libya’s offer for Annan’s mediation came just one month after Iraq’s government quickly accepted a request from the U.N. secretary-general to climb down from a dispute with U.N. weapons inspectors, narrowly averting a U.S. military strike.

In February, Annan negotiated an agreement with Iraqi President Saddam Hussein that ended an earlier U.S.-Iraqi military standoff, winning praise particularly from Arab states eager to avert a new crisis. Many of the Arab nations, as well as Russia and China, oppose the long duration of both the Libya and Iraq sanctions.