The United States plans to meet Libyan officials to gauge their commitment to giving up terrorism before deciding whether to take Libya off its list of "state sponsors of terrorism."
The senior US official's comment has suggests it may take some time for Libya to escape the list and its sanctions, which include a ban on US arms exports, limits on items with dual military and civilian uses, and prohibitions on US aid.
Removing Libya is also critical to relatives of the 270 people who died in the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, who could see their compensation from Tripoli rise if it gets off the list.
On Monday, US Secretary of State Colin Powell said he wanted Libya dropped as soon as possible and he praised its December 19 decision to abandon weapons of mass destruction and its work to destroy them since.
For Libya to get off the list, the State Department must certify to Congress that there has been "a fundamental change in (its) leadership and policies," that it has not provided any support for international terrorism in the previous six months, and that it has promised not to support terrorism in future.
US President George W. Bush a week ago rewarded Libya by suspending US sanctions to allow US firms to buy Libya's oil and invest in its economy for the first time since 1986.
The US source, who spoke on condition he not be named, declined to say whether U.S. officials wanted to see Libyan leader Colonel Muammar Gaddafi himself before making their decision on the state sponsors list.
The United States holds Libya, where Gaddafi has been in power since 1969, responsible for "terrorist" acts including the Lockerbie bombing and the 1986 bombing of the "La Belle" disco in West Berlin in which two US servicemen were killed.