The Americans claim the existing European rules discriminate against their producers in Costa Rica.

They say that a list of European products which would face 100% import taxes if the dispute is not resolved, will be published on Monday.

The banana battle was among the trade and security issues discussed during a meeting between President Bill Clinton and Austrian Chancellor Viktor Klima and EU Commission President Jacques Santer on Friday.

The US has complained that new European banana import rules scheduled to go into effect on 1 January, do not comply with a World Trade Organisation ruling the US won against the EU's banana policies.

Undersecretary of State Stuart Eizenstat said: "We are continuing to try to work our way through the very difficult banana dispute."

He added: "At least on the procedural side there has been some narrowing, but we have not yet reached an agreement."

European Trade Commissioner Sir Leon Brittan said the two sides were only a few weeks apart in terms of timing of a WTO review of the new EU banana regime. The EU says the rules comply with global trade rules, while Washington says they do not.

Punitive tariffs

The US Trade Representative's Office is planning to publish on Monday a list of imports from Europe that would be hit with punitive 100% import tariffs after 3 March, to compensate for lost banana trade.

The US has accused the European Union of being slow to comply with a 1997 WTO ruling that found its banana import policies discriminate against Latin American producers in favour of Caribbean producers.

After the White House meeting, Sir Leon told reporters: "My appeal today to the president was let's not start publishing lists of goods which you are going to threaten sanctions on.

"I can't believe its worth having a major dispute for just a few weeks more," he added.

Wider relations unsullied

But officials on both sides said they would not allow the banana dispute to tarnish broader relations between the two trading powers.

US Trade Representative Charlene Barshefsky said: "Our enormous and highly interconnected trade and economic relationship would not be possible without the efforts we have expended over the years to forge an effective framework in which commercial activity can grow.

"We both must display leadership in protecting and strengthening the WTO system," she said in a statement.

Trade cooperation

The two sides also discussed a transatlantic economic cooperation initiative in which they will try to facilitate trade in a number of goods and services.

"We have special responsibility to show the world that open markets are the way to go," Mr Eizenstat said after the summit.

President Clinton raised the issue of steel imports and the U.S. industry's complaints about a surge of cheap imports from Russia, Asia and Brazil. He asked Europe to do more to take in more steel, particularly from Russia.

But Sir Leon told reporters that Europe also has experienced a surge in imports from Russia.