WASHINGTON — WHEN investigators last November laid the blame for the 1988 bombing of Pan American Flight 103 at Libya's doorstep, Bush administration officials were indignant. "This consistent pattern of Libyan-inspired terrorism . . . cannot be ignored," White House press secretary Marlin Fitzwater warned at the time.
Two months later, the administration can hardly be accused of ignoring Libya. But its response to the event that cost more American lives than the Gulf war has been characterized by remarkable - critics say excessive - caution. Pressure being applied
Administration sources say their policy of gradually increasing pressure on Libya to extradite two suspects in the case reflects a taste for multilateral diplomacy acquired since 1986, the year United States warplanes bombed Libya in retaliation for a terrorist incident in Berlin that left two American soldiers dead.
"We're less prone than we were five years ago to think unilaterally," says one senior administration source. "The Gulf experience has shown what can be achieved through multilateral diplomacy."
But critics, including families of the 270 victims of the Pan Am 103 crash, complain that President Bush's response is a pale imitation of his performance in the Gulf. Instead of pressing its case directly against Libyan leader Muammar Qaddafi, the US is focusing on low-level intelligence agents allegedly operating under Colonel Qaddafi's direct orders. Instead of pressing for sanctions on oil, Libya's economic lifeline, any future US-backed United Nations sanctions would probably be limited to a ban on air service to Libya and the sale of aircraft and spare parts.
Critics say they see diplomatic timidity on the part of the US. "All things have to be weighed against what we did in the Gulf," says Henry Schuler, a Libya expert at the Center for Strategic and International Affairs in Washington. "If we could mobilize the kind of world support we got in the Gulf, why not mobilize against Libya? It's just a question of what priority you want to give it."
On Tuesday the UN Security Council effectively called on Libya to turn over the two suspects, Abdel Basset Ali Al-Megrahi and Lamen Khalifa Fhimah. If Libya does not respond within two weeks the US, Britain, and France are expected to urge the Council to adopt the aviation-related sanctions.
Spokesmen for Libya deny the charges and say the matter should be turned over to international arbitration. The State Department says no international tribunal has jurisdiction over criminal matters. Limits acknowledged
Even administration critics acknowledge the limits of military action against Libya, which would find no backers in Europe and which would arouse the ire of the third world. But they say the US should galvanize a coalition to impose stiff economic sanctions that would make Qaddafi think twice about future terrorist acts and embolden his restive subjects to rebel.
Italy and Germany alone import more than half of Libya's oil. Even a temporary boycott backed by the European Community could have dramatic results. As one Libyan agency admitted this month, such sanctions would "reflect negatively on [Libya's] ability to meet the basic needs of its citizens such as food and medicine."
US officials respond that all options, including the use of military force, are still open. But for now, they say, the US is constrained by political factors that leave little choice but to pursue patient, step-by-step diplomacy through the UN.
Having failed to topple one Middle East strong man - Iraq's Saddam Hussein - through massive force and crippling economic sanctions, US officials are reluctant to try again against another, Libya's Qaddafi.
US policy in the region is also hostage to the Middle East peace process, which could be an instant casualty if Libya were hit with severe Western economic or military sanctions.
Any unilateral action could also upset US efforts to cultivate better relations with the Arab world in the aftermath of the Gulf war. In particular, economic sanctions could backfire on Egypt by prompting Qaddafi to expel Egyptian guest workers in Libya.
Meanwhile, energy analysts say a European oil embargo against Libya is unlikely since, with Iraqi oil already off line, prices of limited supplies would be forced too high. The US has embargoed Libyan oil since 1982. Terrorism experts say the mere threat of tough sanctions and military reprisal may have the effect of tempering Qaddafi's behavior. Strong steps in abeyance
"It is the course that makes the most sense now. We'll pursue it as far as it goes and then reevaluate," says the senior official. "We'll build and strengthen the foundation for taking stronger steps later on."
Investigators who probed the Pan Am incident say the two Libyan suspects placed a plastic bomb attached to an altitude-sensitive detonating device into an Air Malta flight bound for Frankfurt.
In London the bag was transferred to Pan Am flight 103, which blew up over Lockerbie, Scotland. All 259 passengers, including 189 Americans, plus 11 Lockerbie residents, were killed. In contrast, 146 American soldiers were killed in the gulf war.
Indictments were handed down just two weeks after French authorities announced criminal charges against four other Libyans, including Qaddafi's brother-in-law, for the 1989 bombing of a French UTA airliner over Niger, in Africa.
US officials believe the Pan Am bombing was in retaliation for the 1986 US air strike, which killed dozens in Benghasi and Tripoli, including Quaddafi's adopted daughter.