The US says it is mediating intensively between Spain and Morocco to help resolve their territorial dispute over the island of Perejil.

American government officials reportedly said a resolution could be closer, following Secretary of State Colin Powell's phone calls to the Moroccan king and the Spanish foreign minister.

We remain hopeful that a resolution to these issues can be reached on... the basis of returning to the status quo ante

Richard Boucher, State Department spokesman

Earlier on Friday, there appeared to be a breakthrough when Morocco's Foreign Minister Mohamed Benaissa was quoted as saying his country would not send troops back to the tiny island, known to Moroccans as Leila, if Spain withdrew its troops.

But Mr Benaissa later told reporters in Paris that his words had been taken out of context and refused to repeat the pledge.

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Madrid has said it would be prepared to withdraw the troops if it has guarantees from Rabat that it will not reoccupy the island.

Spanish troops swooped on the island on Wednesday, capturing six Moroccan soldiers.

Status quo

US State Department spokesman Richard Boucher confirmed that Mr Powell was working "very closely" with the Spanish and Moroccan governments on the issues surrounding the island.

Perejil island

200m off the Moroccan shore in the Straits of Gibraltar Less than 1km in diameter Rocky and uninhabited Visited by herdsmen who take their goats to graze Named after the wild parsley which grows there - Perejil means "parsley" in Spanish Known in Morocco as Leila

Mr Powell is said to have spoken to King Mohammad VI three times and to Ana Palacio, the Spanish Foreign Minister, four times.

"We remain hopeful that a resolution to these issues can be reached on... the basis of returning to the status quo ante," Mr Boucher said.

The US administration is reported to prefer the island to remain uninhabited and demilitarised.

Moroccan conditions

Mr Benaissa, who is in Paris, said he wanted to get France involved in the diplomatic negotiations.

The Spanish flag now flies over the island

He is also attending a European Union meeting of foreign ministers in Brussels on Monday at which the crisis will be discussed.

The European Commission has called on Madrid and Rabat to renew talks aimed at finding a long-term solution to the dispute.

But in a radio interview, Mr Benaissa said the Spanish troops would have to leave the island before dialogue could begin.

Spanish fears

The current crisis over Perejil erupted on 11 July, when Morocco placed its troops on the island.

Despite a military build-up in the area, Spain had given no prior public warning that the Moroccan troops might be removed by force.

Now, several dozen Spanish soldiers stand guard on Perejil as Moroccans on the nearby coastline vent their anger, shouting and throwing stones.

The rocky island, hardly larger than a football pitch has belonged to Spain since 1668, although it has been uninhabited for the past four decades.

Spain has two enclaves in Morocco - Ceuta and Melilla - and a number of other rocks and islands.

There are concerns in Spain that the dispute over Perejil could be a prelude to Moroccan demands for a full Spanish withdrawal.

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