Sudan's foreign minister said Tuesday that her country is nearing a deal with Washington to compensate the families of victims of deadly 1998 embassy bombings, paving the way to Khartoum's removal from a US terror blacklist.

Massive, nearly simultaneous blasts at the American embassies in Nairobi and Dar es Salaam in August 1998 together killed 224 people and injured around 5,000, almost all of them Africans.

Al-Qaeda claimed the attacks, but the US accused Khartoum of aiding jihadists linked to the bombers and retaliated by destroying a Sudanese pharmaceutical factory in Sudan which it claimed was producing a nerve agent.

Washington has since demanded compensation for the American victims' families, placed Sudan on a blacklist of state sponsors of terrorism and imposed crippling sanctions.

But Sudan's Foreign Minister Asma Abdalla told AFP on Tuesday that "the final touches of a settlement with victims of (the bombings) are being finalised."

"We now have a delegation in Washington negotiating with the victims' lawyers and officials at the US Department of State," she said, adding that such a deal would mean Sudan "will have fulfilled all the requirements" to be removed from the US blacklist.

"We expect the US administration to complete the legislative measures and complete the removal of Sudan from the list... as soon as possible," she said in an interview.

Sudan had dire relations with the US under Islamist ex-president Omar al-Bashir, who came to power on the back of a military coup in 1989.

Bashir was ousted by the military in April last year following months-long protests against his rule.

Transitional authorities who came to power in August last year have been seeking to boost the country's international standing and rebuild ties with the US.

- Warming US ties -

Under Bashir, Sudan hosted Al-Qaeda founder Osama bin Laden and sent jihadist volunteers to fight in the country's civil war with South Sudanese separatists.

After being blacklisted in 1993, Sudan expelled Bin Laden -- but the US designation and sanctions remained in place.

Sudan hopes bolstering relations with the US will rescue its ailing economy, decimated by sanctions and the 2011 secession of oil-rich South Sudan.

Khartoum recently finalised a deal compensating families of victims of the 2000 USS Cole bombing in Yemen's Aden harbour, for which Al-Qaeda also claimed responsibility.

Sudan always denied any involvement but agreed to the settlement to fulfil US conditions.

As their ties have warmed, Prime Minister Abdalla Hamdok visited the US in December and in May, Sudan appointed its first ambassador to Washington in more than two decades.

Abdalla called that move "a stepping stone on the path of fully normalisation of relations between Sudan and the US."