Obama, Gaddafi shake hands at G8 dinner

L'AQUILA, Italy, July 9 (Reuters) - Libyan leader Muammar Gaddafi met his first U.S. president on Thursday, shaking hands with Barack Obama and sitting just one place away from him at a dinner for world leaders at a G8 summit in Italy.

The two leaders were photographed greeting each other and television images later showed Obama and Gaddafi -- who wore ruby red- and gold-flecked robes and hat -- separated only by Italian Prime Minister Silvio Berlusconi at the dinner table.

Strained for many years over Libyan support for groups Washington considers terrorist, U.S.-Libyan ties have thawed in recent years. But there is still mistrust on both sides and relations are businesslike at best.

Gaddafi, who former U.S. President Ronald Reagan once called the "mad dog of the Middle East", received the then-U.S. Secretary of State Condoleezza Rice in Libya last year and former president George W. Bush spoke to him on the telephone.

The famously eccentric leader raised eyebrows earlier in the day when he hopped out of his white limousine for a 15-minute stroll on the highway from Rome to the summit site of L'Aquila, according to Italian news agencies.

This is Gaddafi's second trip to Libya's former colonial ruler Italy in a month. He arrived last month wearing the photo of a colonial-era Libyan resistance hero pinned to his chest.

The Libyan leader, who is at the G8 summit in his role as African Union chairman, is staying in a bedouin tent pitched on a soccer field in L'Aquila's police barracks, just a few kilometres (miles) away from less-opulent tents for those left homeless by an April earthquake.

(Writing by Deepa Babington; editing by Michael Roddy)