The World Court ruled Friday that it has the authority to settle a legal dispute that has blocked the trial of two Libyans suspected of blowing up a Pan Am jet over Lockerbie, Scotland, in 1988.

Libya had asked the court to lift U.N. Security Council sanctions aimed at forcing the suspects' extradition. The United States and Britain argued that the World Court had no jurisdiction to hear Libya's case; the court rebuffed them Friday, saying it does.Libya welcomed the U.N. high court's decision and said it would renew pressure for a trial of the suspects in a neutral country. The United States and Britain have pressed for trial on their soil.

The ruling drew sharply differing reactions from families of the 270 people killed in the air and on the ground when a suitcase bomb shredded U.S.-bound Flight 103 over Lockerbie on Dec. 21, 1988. Their hopes for a trial have been frustrated by years of legal wrangling, and the families have split on the key issue of where any trial should be held.

Friday's ruling did not address venue. It could be years before that matter is settled.

Dr. Jim Swire, who lost his daughter, Flora, in the explosion and who now represents a group of British relatives of victims, said he was "very excited" by the court's intervention, which he hopes could avert an unbreakable deadlock on where the trial should be held.

In America, however, some families thought it intolerable interference with what they saw as the United States' right to prosecute.