Prime Minister Paul Martin Martin met with Moammar Gadhafi Sunday for about an hour and a half inside the Libyan dictator's tent at a military base on the outskirts of Tripoli.

The two men smiled and shook hands before heading for the ornate tent, not far from the remains of Gadhafi's bombed out residence, where one of his children died when U.S. fighter jets attacked the building in 1986.

Martin told reporters discussion focused on international concerns including the situation in Darfur, human rights and trade.

Martin also stressed the need for judicial reform in Libya, due process and consular access to foreign nationals.

The prime minister also met with Canadian business leaders looking for contract work in Libya and joined Montreal-based SNC Lavalin in celebrating a potential $1-billion deal for further work on the Great Man Made River project.

The project will divert water from desert wells in southern Libya to northern coastal cities.

Lavalin president Jacques Lamarre says it was crucial for Martin to come to Libya to boost Canadian business.

Martin also met with Petro-Canada president and CEO Ron Brenneman, who hopes to win lucrative oil leases coming up for tender early next year.

Petro-Canada produces 50,000 barrels a day in Libyan oilfields.

Verenex Energy of Calgary is also bidding on oil leases.

The prime minister raised specific human rights cases with Gadhafi, but the particulars were discussed later in the day between Foreign Affairs Minister Pierre Pettigrew and Libyan Prime Minister Shukri Muhammed Ghanem.

Amnesty International is pushing for a fair trial for Canadian Mustapha Muhammad Krer, who was arrested upon arrival at the airport in Tripoli airport in May 2002 and accused of being in a group with ties to al-Qaeda, a charge he denies.

Before he was scheduled to return to Canada, Martin was invited by Gadhafi to a second, impromptu meeting Sunday evening, where the Libyan leader showered praise on Martin and on Canada.

"I send my regards and compliments to the Canadian people and congratulate them for the progress they have achieved so far," Gadhafi told Martin. "I congratulate them on the democracy that is exercised by all ethnic groups."

"On a personal level, we have gained quite a personal friendship. We are friends not just because he is the prime minister of Canada, but because we shall always be friends even if he is not the prime minister, "added Gadhafi.

Martin's visit follows a thawing of relations between western nations and the North African dictator who was once dubbed "mad dog" by former U.S. president Ronald Reagan.

A string of leaders has visited Gadhafi since he renounced terrorism and gave up his chemical weapons program.

Already this year, Gadhafi has held talks with French President Jacques Chirac, British Premier Tony Blair, German Chancellor Gerhard Schroeder and Italian Premier Silvio Berlusconi.

Martin's short but ambitious trip, originally scheduled for a full two days, was cut to 20 hours in order that he attend the funeral of Labrador MP Lawrence O'Brien, scheduled for Monday morning.