The two countries signed an accord which aimed to put their colonial past behind them, and open a new era of improved relations.

Italy called on Libya to forget the past, and expressed regret for the Libyan people's suffering at the hands of Italian colonialism.

"It therefore acknowledged the black colonisation period and the loss of Libyans' lives and the huge damage and miseries inflicted on the Libyans, their agriculture and construction," said Libyan television.

Meanwhile Italian radio used very different language to report the agreement.

"Italy and Libya have settled their past disputes and have started a new phase in relations between the two countries," it said.

The Italian Foreign Minister, Rino Serri, went on to explain: "We have very strong common interests on the level of trade, the economy, tourism, energy, oil and gas, and this bolsters our prospects for security and development."

Friendship pact

The accord was signed in Rome on Thursday during a visit by the Libyan foreign minister, Omar Mustafa el-Muntasser.

It hopes to bring to an end a history of conflicts which began when Italy invaded Libya in 1911.

The accord promises to combat terrorism and respect human rights, and commits both sides to refrain from producing weapons of mass destruction.

Italy will also help clear minefields left in the Libyan desert dating back to the Second World War, which still claim occasional victims.

It is the latest effort by Italy to improve relations with Islamic countries.

Last month the Italian prime minister visited Tehran - the most influential European leader to do so since the 1979 revolution.

Italy, which ruled Libya from 1911 to 1943, has had difficult relations with Libya's current leader, Colonel Muammar Gaddafi, since he ousted the monarchy in 1969.

In 1970, Col Gaddafi expelled Italian residents and confiscated their property. Those Italians are still seeking compensation and damages.

Libya has now agreed "to allow Italian citizens expelled from Libya to go into that country again, for reasons of work, family or tourism," according to the statement.