By Alastair Leithead
BBC Asia correspondent
Despite worldwide indignation, Ms Suu Kyi is still under house arrest
This month Burma's pro-democracy leader Aung San Suu Kyi passed two milestones.
The first was 14 years - that is the amount of time she has now spent in detention during the past two decades.
The second was to meet Western diplomats and begin talks with Burmese military leaders - talks which some think could see her released.
"Given the impasse of the last 20 years, what has happened in the last three months gives us the hope there will be some movement," says Derek Tonkin, a former British ambassador and current Burma activist.
There seemed little hope of progress in August, when Burmese pro-democracy leader Aung San Suu Kyi, known as The Lady, had her house arrest extended by 18 months for allowing an uninvited American man to stay in her lakeside home after swimming to see her.
While the controversial court case was going on, the Obama adminstration was looking at engagement within a review of its Burma strategy ahead of elections planned for Burma next year.
This was happening amid the fear of increasing Chinese influence in the gap left by Western isolation.
Soon after the trial ended, Senator Jim Webb became the most senior US official to meet Burma's top general, Than Shwe.
He was also allowed to see Aung San Suu Kyi - something even UN Secretary General Ban Ki-Moon could not do.
Senator Jim Webb was allowed to visit Aung San Suu Kyi
As a man reporting back directly to President Barack Obama, his message that "sanctions hadn't worked" was what the generals wanted to hear.
He emphasised the increased influence of China as well - an Asia-wide trend that has Washington worried.
The next step was a switch in US policy towards "pragmatic engagement" - in other words, direct senior level dialogue with the leadership.
US demands include the release of political prisoners, including Ms Suu Kyi, but what are they offering in return?
The only high-value card is sanctions, and that is what The Lady also used to open her own talks.
Her recent letter to number one general Than Shwe requested a meeting with Western diplomats for her to establish what sanctions are in place, and it was permitted within a week.
"The generals are looking for international recognition for the 2010 election. They are trying to co-opt Aung San Suu Kyi and her National League for Democracy to take part in the elections without any constitutional change," said Derek Tonkin.
"We are still waiting for a really significant movement, but I could see Aung San Suu Kyi being released before the election if they could secure an understanding."
An end to sanctions?
The message from Burma's Prime Minister Thein Sein at the recent meeting of the Association of South East Asian Nations (Asean) in Thailand was that the ruling generals see a role for Ms Suu Kyi in fostering reconciliation, according to Thai Prime Minister Abhisit Vejjajiva - and that the conditions of her detention could be relaxed.
Thant Myint-U, a Burmese historian and author whose grandfather was UN Secretary General U Thant, thinks her early release is possible but unlikely. He believes the purpose of the talks is partly to find out what exactly the Burmese want.
"It is extremely unlikely the US Congress will overturn sanctions, but if the US government thinks the Burma generals are moving in the right direction there are other things they can do," he said.
"Everything from using the name Myanmar, rather than Burma, to lifting some of the restrictions the US has on multilateral co-operation to assistance programmes."
US Assistant Secretary of State Kurt Campbell made it clear that dialogue would supplement rather than replace sanctions.
"We will maintain our existing sanctions until we see concrete progress," he told the US House Committee on Foreign Affairs this month.
"We believe any easing of sanctions now would send the wrong signal to those who have been striving for so many years for democracy in Burma."
Mark Farmaner, from Burma Campaign UK, which has strongly supported sanctions, said the US policy of demanding results is what the UN has failed to do, and will put extreme pressure on the regime.
"Sanctions were always meant to be one of the few tools to give them leverage to force the generals into talks, but they should not be given away unless you get something in return," he said.
"One hundred political prisoners of more than 2,000 are seriously ill and being systematically refused medical treatment. The regime is ruthlessly pushing ahead with its agenda. You have to look at history and come back down to earth.
The junta have sometimes seemed impervious to international criticism
"We are afraid of EU countries pre-emptively lifting sanctions and that would send the wrong message to the generals," he added.
There doesn't appear to be much fear of that, as the European Union still has not made an official statement.
Some sources suggest this is because Britain is "dragging its heels" and urging collective caution.
But Western diplomats say Europe will soon open up its own dialogue with Burma, following the US lead.
"The elections may not be free and fair, but we need to be there anyway," diplomats say, pointing out it's the first opportunity in 20 years for any change at all, and the West has to position itself to engage with a new government made up of at least some elected civilians.
So does that mean lifting some European sanctions? Only in co-ordination with the US policy, but it's understood consideration is being put to the mechanics of what might be lifted and when.
This could include the re-opening to Burma of special EU trade access for developing countries, or allowing access to international financial institutions like the World Bank, the International Monetary Fund and the Asian Development Bank.
Author Thant Myint-U thinks the ruling generals will balance their image abroad and better relations with the West against their well-established plans for a "democratic" Burma.
"There is concern among some quarters in Burma of an over-reliance on China, and as the US is the only balancer they think it is time to reach out to the US," he said.
Progress is slow, but as one diplomat said "anything can happen in Burma".