Nuclear cooperation agreement would be first such pact between United States and a Middle East country.
The United States and the United Arab Emirates are close to clinching a deal for civilian nuclear cooperation, State Department spokesman Sean McCormack said Friday.
However, McCormack, who did not make clear if US president George W. Bush hoped to sign it before he leaves office, cautioned that such a deal would still have to clear many legislative and other hurdles before it takes effect.
McCormack was commenting on a report in the Wall Street Journal that said the Bush administration plans to sign a nuclear cooperation deal with the UAE, the first such pact with a Middle East country.
"We have engaged the UAE on this topic because we think it is an important way for countries in the region to potentially realise peaceful uses of nuclear energy and clearly prescribing the limits of the use of nuclear technology," McCormack said.
"We believe that that is responsible. It certainly stands in contra-distinction to the actions of Iran," he said, referring to US-led moves to stop Iran from enriching uranium amid fears it could lead to an atomic bomb.
"And where we stand right now with the UAE is I believe that we have a common understanding about a text," McCormack said, specifying that one has not been signed yet.
"But there are many, many steps that... must be taken before you have an agreement that actually enters into force," he said.
He recalled it took more than three years for a similar US-Indian nuclear deal to clear key hurdles after Bush and Indian prime minister Manmohan Singh signed one in July 2005.
As with the India deal, McCormack denied the one with UAE would undermine global efforts to curb the spread of nuclear know-how.
The development comes after US secretary of state Condoleezza Rice and UAE foreign minister Sheikh Abdullah bin Zayed Al Nahayan signed a memorandum of understanding (MoU) on civilian nuclear energy cooperation in Bahrain in April.
McCormack told reporters that he understood that that MoU, for which no details were released at the time, was "something that indicated we were going to move forward in this process".
The Journal wrote that the UAE-US deal calls for the United States to share nuclear fuel, technology and know-how in return for commitments to follow the Nuclear Non-proliferation Treaty and UN safeguards.
The UAE has already signed agreements with two US engineering companies, Thorium Power and CH2M Hill, to help with develop nuclear power plants, according to the paper.
And the country has also recruited a former official from the US Nuclear Regulatory Commission to help run its own atomic regulatory agency, it said.
It was unclear if president-elect Barack Obama, who takes office on Jan. 20, would back the proposed agreement and lobby Congress to ratify it.
The Bush administration had hoped to have the accord with the UAE, which is Iran's largest trading partner, signed last month, the paper reported.
But UAE officials decided to postpone the signing given Obama's election victory in November and possible opposition in Congress, unnamed officials told the Journal.
The UAE is sensitive to congressional reaction after its state-owned company DP World had to cancel plans in 2006 to buy US port holdings from British P&O due to stiff opposition from American lawmakers.
The staunch US ally also signed a deal with France for help in developing nuclear energy for peaceful ends during a visit by French president Nicolas Sarkozy to Abu Dhabi in January.
The Bush administration meanwhile is pursuing nuclear cooperation agreements with Saudi Arabia, Jordan and Bahrain.