Libya's Moammar Gadhafi has long styled himself as one of the Arab world's chief defenders against western dominance. But the message from his headquarters these days has little to do with the revolutionary themes that have sustained him during 30 years in power. Instead, it is this: Send tourists.

And investors. And anyone else interested in helping end Libya's isolation and move it into the regional and global mainstream.

After seven years under international sanctions and longer as a sponsor of rebels in and outside the region, Gadhafi has now given Libya's politics a practical hue, focused more on building power plants and oil wells than on the dream of a unified Arab world, according to diplomats here and in Tripoli.

"They do seem to be undergoing change," said Alastair King-Smith, charge d'affaires at the newly reopened British Embassy in Libya. "The people have not changed but the messages seem to be messages for normalizing all aspects of the relationship, allowing more foreign investment and generally freeing things up."

The agreement last spring to relinquish for trial two Libyans suspected in the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, is the major step Gadhafi has taken on his road to restoring Libya's relations with the rest of the world. The deal allowed suspension of U.N. sanctions that had grounded air travel and interrupted economic development of an otherwise wealthy oil exporting nation just west of Egypt.

But it is not the only sign of Libya's desire to square accounts with western nations affected by radicalism that included arms shipments to the Irish Republican Army and the 1986 bombing of the crowded La Belle disco in Berlin. It was during former President Reagan's era in particular that Libyan-U.S. relations soured: Along with U.S. designation of Libya as a state sponsor of terrorism, U.S. fighters attacked Gadhafi's headquarters in 1986 in retaliation for the disco bombing.

In recent weeks, however, Libya has sought to be accommodating on that front.

The country agreed to pay $40 million in compensation after courts in Paris convicted six Libyans, including Gadhafi's brother-in-law, in the 1989 bombing of a French airliner. It also accepted responsibility for the mid-1980s shooting of a British constable who was helping police at a demonstration outside the Libyan Embassy in London. That cleared the way for the recent reopening of the British Embassy in Libya.

Less publicized but also significant, Arab diplomats in Cairo say, Libyan officials have told militant Palestinian leaders that Libya from now on will deal only with Yasser Arafat's Palestinian Authority. That is an important change from the support Gadhafi once gave to hard-line groups that rejected Arafat's peace agreement with Israel.

Over the past year, several accounts have been published about how Libya rid itself of one prime remnant from its old way of doing business: Hassan Sabri Banna, known as Abu Nidal, one of the world's most spectacular engineers of terrorist operations. Journalists disagreed about where Abu Nidal ended up, but were in accord that he had a falling-out with Gadhafi and had to close his training camp in the Libyan desert.

"It is a less ideological and more pragmatic policy," said one Arab diplomat.

In the weeks since the Lockerbie deal was announced, jockeying to rebuild and expand Libya's infrastructure has begun in earnest. Trade delegations from Saudi Arabia, the United Arab Emirates, South Africa and several European countries have visited Libya, taking advantage of air service that was restored when U.N. sanctions were lifted. At a recent German trade fair, one diplomat reported, the Libyans sent a large delegation that was particularly interested in building a tourist business, presumably to revolve around the country's many Roman ruins.

"They are very ambitious of what they want to do," King-Smith said. "They want to see Libya as an African gateway to Europe -- a major center for tourism, a sort of international route for trade and investment."

American firms would be natural participants in any Libyan renewal because most of the country's oil infrastructure was originally built by American companies. But they remain restricted from participating by unilateral U.S. sanctions that are still in place limiting investment or travel for business and tourism.

Gadhafi also has moved to put himself back on the political stage. Libya's delegation to the recent Organization for African Unity conference in Algeria was the largest sent by any nation, and he won acceptance for a meeting in September of African heads of state in Libya. He has offered himself as a mediator, too, for disputes among sub-Saharan African nations, a sign of his professed desire to reorient Libya away from the Arab world and toward Africa.

Why Libya is changing course is a matter for speculation. Gadhafi's rhetoric remains intransigent and his style such that other Arab leaders consider him eccentric, at best. On a recent state visit to Egypt, he established camp -- literally -- outside the palace where he was to stay, pitching a large tent in which he conducted his meetings. He did the same at the OAU conference, outside the Sheraton Hotel where other guests stayed.

"America treats Libya the way Hitler treated the Jews," Gadhafi said in an interview with Milton Viorst published in a recent issue of Foreign Affairs magazine. "America wants to occupy . . . the north of Africa. It wants to hand over Egypt and Syria to Israel, so that a Greater Israel is established."

But around Gadhafi, and rising to influence in the government, Viorst said he found a new class of technocrats vying to change Libya's path, an observation other diplomats and observers shared.

"There are a bunch of indicators of a new dynamic in Libya," said one Arab diplomat in Cairo. "There is a group of people who are becoming more visible . . . and who speak a different language. When you go and argue about tourism, that implies a certain amount of openness."

CAPTION: Libyan leader Moammar Gadhafi has been normalizing relations with Western states over the last year.