TRIPOLI, Libya (Reuters) -- French President Nicolas Sarkozy met Libyan leader Muammar Gaddafi on Wednesday on a trip to deepen relations after helping to resolve a diplomatic standoff that hurt the oil exporter's ties with the West.
Libyan officials said the two countries would sign an accord on cooperation on a military-industrial partnership and another to activate what they called a previous agreement on cooperation on the peaceful uses of nuclear energy.
Sarkozy, who met Gaddafi in a tent in the compound of his Tripoli residence, has said he wants to help Libya return to the "concert of nations" after it freed six foreign medics convicted of infecting hundreds of Libyan children with HIV.
The medics -- five Bulgarians and a Palestinian -- left Libya on Tuesday on a French plane accompanied by Sarkozy's wife, clearing the way for a visit by the president.
"I am happy to be in your country to talk about the future," Sarkozy wrote in a book at Gaddafi's residence. He is seeking to further French business interests in Libya and boost diplomatic ties before flying on to Senegal and Gabon.
"There will be the signing of an agreement on cooperation on a military-industrial partnership," Libyan Foreign Minister Mohammed Abdel-Rahman Shalgam told reporters shortly before Sarkozy and Gaddafi met.
Libya ended decades of international isolation in 2003 when it agreed to halt a weapons program prohibited by the United Nations and pay compensation for the bombing of a U.S. airliner over Scotland in 1988 in which 270 people were killed.
The following year it signed a similar deal over the 1989 bombing of a French UTA plane over the West African country of Niger that killed 170 people.
France convicted six Libyans in absentia for the UTA attack.
French-Libyan relations, which had been warm in the 1970s, hit a low during the UTA dispute and French officials spoke of a new era after the compensation deal.
French oil firms had benefited from the absence of U.S. competitors in Libya.
But U.S. oil firms, barred since 1986 due to economic sanctions, have now resumed their activities and Libya has held three oil licensing rounds to draw foreign investment and boost oil exports.
Most of the permits were awarded to U.S., Japanese and Russian firms.
Sarkozy will be keen to maintain France's influence in Libya as other Western powers beat a path to Tripoli and Washington gradually steps up its diplomatic presence in the country.
U.S. President George W. Bush's administration nominated its first ambassador to Libya in 35 years when it became clear the medics' case was on the way to being resolved.
Former British Prime Minister Tony Blair helped smooth the way for a resolution of the standoff over the medics during a visit to Libya in May, his second since the end of sanctions.
A British government spokesman said Foreign Office Minister Kim Howells was flying to Tripoli on Wednesday and would meet Libyan ministers to "advance our bilateral relationship". E-mail to a friend
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