SOFIA, June 19 (Reuters) - Bulgaria has granted citizenship to a Palestinian doctor sentenced to death along with five Bulgarian nurses for infecting hundreds of Libyan children with the HIV virus, Foreign Minister Ivailo Kalfin said on Tuesday.

The decision could help bring him out of Libya if the verdicts are eventually commuted under a possible deal to compensate the families.

On Wednesday, Libya's Supreme Court will hear the appeal of the medics who say they are innocent and were tortured to make confessions. Bulgaria, the European Union and United States have called for their release.

"In case of a favourable development in the case, he can be brought back to Bulgaria with the nurses under the legal agreement with Libya," Kalfin told reporters, referring to a long standing agreement which allows for prisoner exchanges.

Kalfin said Ashraf Alhajouj applied for citizenship two years ago and procedures were completed last week.

The Libyan Supreme Court is expected to confirm the death sentences and that would then leave the fate of the medics in the hands of Libya's High Judicial Council, which has the power to commute them.

Political analysts say the council would be likely to let the nurses return to Bulgaria if a compensation deal can be reached.

Talks between the European Union and the association of families resumed last month with both sides citing progress and saying they hoped for a deal soon. The association wants around 10 million euros (almost $14 million) for each family.

Sofia has refused to pay, saying it would be an admission of guilt. But it has set up a solidarity fund along with the European Union and the United States to provide medical aid and financial support to the children and their relatives.

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