Italian Premier Silvio Berlusconi will visit Libya this month for talks with Libyan leader Muammar Gaddafi, government sources said on Wednesday.
It will be Berlusconi's first visit abroad since his return to office in elections two months ago.
The visit comes a month after Libya criticised Berlusconi's decision to reappoint Roberto Calderoli of Northern League to his new executive.
In 2005, Calderoli was forced to resign from Berlusconi's previous government after he sported a T-shirt with one of the notorious Danish cartoons that lampooned the Prophet Mohammed.
The provocation led to riots outside the Italian embassy in Tripoli in which 11 protesters were shot by police.
After Calderoli's appointment Libya said it would freeze an agreement on immigrant cooperation, prompting the minister to apologize and explain that his cartoon gesture had been ''misunderstood''.
The sources said talks between Berlusconi and Gaddafi will focus on lengthy negotiations for a friendship and cooperation accord which would finally resolve issues related to Italy's colonial occupation of the North African country in 1911 and the expulsion of some 20,000 Italians by Gaddafi.
The Libyan leader has long demanded compensation for damages caused during Italy's occupation of the country.
The 1970 expulsions came a year after Gaddafi came to power in a coup. Most of the Italians had been in Libya since the colonial period.
The friendship accord was almost sealed last year by the centre-left government of then-premier Romano Prodi but Gaddafi decided against it.
Government sources said discussions between Berlusconi and Gaddafi would also dwell on ways of stemming illegal immigration through the north African country towards Italy.
One of the main routes for would-be immigrants is through the desert from central Africa, into Libya and up to ports on the northern coast.
Here they pay organised crime groups to ferry them in creaking boats towards Italy.
At least 40 people drowned and another 100 went missing when a boat taking would-be migrants capsized on its way to Italy from Libya earlier this month.
In 1998, Italy played a key role in breaking Libya's international isolation which had been imposed following its role in the December 1988 bombing of a Pan Am jetliner over Lockerbie, Scotland.
Italy is Libya's biggest trade partner and 25% of Italian oil imports come from the North African country.
