A delegation led by Ahmed Ben Heli, the Arab League's assistant secretary-general, flew Sunday to Tunisia, where delegation members were then driven to the Libyan capital, Tripoli.
Representatives from six Arab countries also were to attend the handover, Ben Heli said.
"It is good news for the Libyans, indeed for all Arabs, that this quandary is finally over," Ben Heli told The Associated Press before leaving Cairo, site of the League's headquarters.
The move followed reports that the chief U.N. legal counsel, Hans Corell, had left for Europe on Friday on his way to Libya to arrange the handover. The suspects, Lamen Khalifa Fhimah and Abdel Basset Ali al-Megrahi, are to be tried under Scottish law in the Netherlands.
The Dec. 21, 1988, bombing of the Pan Am jet over Lockerbie, Scotland, killed 270 people, mostly Americans and Britons, on the air and the ground. The two Libyans, allegedly former intelligence agents, were suspected of planting a suitcase bomb on the plane.
Ben Heli said he would represent the League's secretary-general, Esmat Abdel-Meguid, who could not make the trip because of other commitments.
The Algerian diplomat said the Libyan government also has invited foreign ministers of six Arab countries that formed a contact group set up by the League in 1992 to help negotiate an end to the crisis with the United States and Britain.
Mohammed Zaki Abu Amer, an Egyptian foreign minister's envoy, left with Ben Heli to represent Egypt. Other countries expected to send high-ranking officials were Syria, Morocco, Tunisia, Algeria and Mauritania.
Arab diplomats in Cairo said Libya also has asked South Africa and the Organization of African Unity to send representatives.
After a decade of insistence that Fhimah, 42, and al-Megrahi, 46, be extradited to the United States or Britain for trial, the U.S. agreed in August to a trial in the Netherlands. Libya said last month it would turn the men over on or before Tuesday.
Terms of the deal call for the U.N. Security Council to suspend sanctions imposed in 1992, including an air embargo, as soon as the suspects arrive in the Netherlands.
Arab diplomats said Saturday that Libyan leader Col. Moammar Gadhafi has ordered the passports of the two suspects returned to them.
In Libya, secrecy has surrounded the operation and officials contacted by telephone have refused to divulge details about the much anticipated handover.
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