EU Commission vice president Loyola de Palacio said she hoped talks in Washington on January 29-30 would iron out the remaining obstacles holding up a joint cooperation agreement on the satellite issue.

She said positive statements last week by US officials "reinforce the EU's goal of defining, together with our US partners, the standard for the best possible civil system for the benefit of users worldwide".

The United States has expressed concern that Galileo -- a joint undertaking between the EU and the European Space Agency -- may interfere with the military applications of its Global Positioning System (GPS).

But the Europeans have agreed to change the modulation of Galileo signals intended for government use so they would not disrupt encrypted GPS signals to be used by the US military and NATO, officials say.

This month's Washington talks will tackle two remaining obstacles -- the coexistence of Galileo's civilian signal with GPS, and the modulation of GPS's military signal in the event of a crisis.

The European Commission said it had made several concessions already on the civilian signal, and was loathe to undermine Galileo's commercial prospects by degrading further its high performance.

On the GPS military signal, the Commission said only that it would "take account of US national security concerns" at the upcoming meeting.

At one point, Washington suggested that Galileo was an unnecessary rival to GPS that merely duplicated the US system.

But Europe has forged ahead with the three-billion-euro (3.7-billion-dollar) project, which is set to be operational by 2008 with 30 satellites encircling the globe in medium orbit.

Galileo's backers say it should provide users, ranging from aircraft and shipping to cars and trekkers, with a navigational fix accurate to within a metre (three-and-a-quarter feet), much more accurate than GPS.

The head of the US team negotiating with Brussels was also upbeat about prospects for progress towards an accord later this month.

"We can move very close to an agreement at the next round which is in the final week of January. If all goes well, the negociations will end in two or three months," said Ralph Braibanti.

"If (there are) complications, it will end in the middle of the year," he added, in a video conference with journalists in Brussels.

He added that Washington had long been supportive of alternative satellite navigations systems being developed.

"We could see early on, even before Galileo was announced, that a second or a third satellite navigation system would benefit users in the United States, as well as in the world," he said.

"The more satellites you have operating as long as you meet certain inter-operability and compatibility requirements are user's benefits."

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