Britain is proposing lifting United Nations sanctions imposed on Libya after the 1988 Lockerbie bombing that killed 270 people.
This comes after Tripoli accepted responsibility for the attack. There are reports however that France may use its veto in the vote that is expected to take place this week.
White House Spokesman Scott McLellan has said Washington will not oppose the lifting of sanctions, though its own bilateral measures against Libya will continue.
"We will not oppose the lifting of UN sanctions. But when you get to the bilateral sanctions, our United States sanctions will remain in place because we still have a number of serious concerns when it comes to Libya."
Under the agreement signed last week the families of Lockerbie victims will receive the equivalent of an estimated 2.7 billion euros.
"We are working together, and coordinating together as we move forward on this particular issue of Pan Am 103. We would not wish to see anything that would impede the Pan Am 103 settlement, but we of course feel great sympathy for the French families and others who lost people on the UTA flight," said US State Department spokesman, Richard Boucher.
France is trying to obtain more compensation from Libya for the families of 170 people killed in the 1989 bombing of a French passenger jet over Niger. There are reports France may veto the permanent lifting of UN sanctions against Libya unless it obtains more money from Tripoli.
**PHOTO CAPTION***
Abdel Basset Ali el-Megrahi was convicted to life imprisonment for the Lockerbie bombing which killed 270 people. (AFP/File)