Can the two sides reach an agreement?

The discussions were aimed at settling differences between the two countries ahead of a 34-country summit later this month.

The two have disagreed over farm subsidies and anti-dumping tariffs.

The "Free Trade Agreement of the Americas" (FTAA) is meant to be signed off by the end of this year.

The meeting in Washington included 16 of the 34 countries whom the US wants included in the FTAA.

Optimism

Brazilian Foreign Minister Celso Amorim said progress had been made in his meeting with US trade representative Robert Zoellick.

"I think we now have a good basis for a successful meeting in Miami," he said, referring to the forthcoming 34-country summit.

He added that he and Mr Zoellick had outlined their vision for the free trade area to the other 14 countries at the meeting.

"Of course, the substantive issues are not resolved, but the general approach is one, that maybe with observations that should be included, will enable us to move forward," he said.

A senior US trade official told reporters the meeting had been "positive and useful", although settling the differences would remain a tough task.

"It is going to be a challenge," he said.

"But I feel certainly better about it today than I did two days ago because I think that we got some useful insight in this meeting."

The US wants the FTAA to include regional rules covering, among other things, government procurement, foreign investment and lower tariffs.

But Brazil says these issues should be decided by the World Trade Organisation (WTO) and wants to focus on farm subsidies instead.

Opposition

The creation of the FTAA is one of US President George W Bush's key economic goals.

But in the wake of the collapse of world trade talks in the Mexican resort of Cancun in September, the chances of reaching a deal looked remote.

Brazil was one of three leading developing countries - the other two were India and China - who led opposition to the US, Japan and Europe in Cancun.

They demanded that the richer countries move further and faster on agricultural subsidies and tariffs before they were prepared to accept new issues such as investment protection and the trade in services.

Brazilian President Luiz Inacio Lula da Silva renewed calls for fairer trade rules for developing nations this weekend.

Speaking in South Africa on the last leg of his African tour, he urged "joint action" to promote developing countries' interests.