Swiss President Hans-Rudolf Merz has apologised for the arrest in 2008 of one of the sons of the Libyan leader Moammar Gaddafi.Two Swiss businessmen currently detained in Libya would be released "soon", according to a finance ministry statement.
"We are apologising for what happened to Hannibal Gaddafi and the two sides agreed to form a committee to discuss the matter," Merz told reporters in Tripoli.
Libyan Prime Minister al-Baghdadi Ali al-Mahmoudi said the two countries had agreed on a "normalisation" of their relationship, a decision that was confirmed by Merz.
Relations between the countries have been strained since last July when Hannibal Gaddafi and his wife were arrested in Geneva, charged with assaulting two domestic employees. The charges were later dropped, but Libya has since been restricting Swiss business activities in the country.
Earlier in the year Geneva authorities rejected calls by Libya to apologise over the handling of the arrest of one of Hannibal Gaddafi.
"We have found that the rule of law was respected, that international conventions were not violated and in the final analysis, there was perhaps a problem of a lack of tact," the cantonal government president, David Hiler, said in January.
Libya cut back oil supplies to Switzerland and withdrew more than $5 billion in assets from Swiss banks in 2008 over the incident.
Foreign Minister Micheline Calmy-Rey last month said Switzerland intended to seek a meeting with the Libyan leader in order to help settle the dispute.
swissinfo.ch and agencies
