UPDATE 1-Alabama's Jefferson County seeks bridge loan

* County negotiating with Regions Bank over loan

* Decision on loan within two weeks -county (Adds comment from Regions bank)

By Melinda Dickinson

BIRMINGHAM, Ala., Sept 2 (Reuters) - Alabama's troubled Jefferson County is seeking a bridge loan from Regions Bank RFGBK.UL to enable it to bring back critical staff laid off because of a financial crisis, the county commission president said on Wednesday.

A decision on the loan would be made within two weeks after the county's interim finance director, Travis Hulsey, met bank officials on Wednesday, commission President Bettye Fine Collins told a council meeting.

Jefferson County, home to Alabama's largest city of Birmingham, laid off more than 1,000 workers in August because of falling revenue connected to a national recession and a lapsed occupational tax, which was recently revived by the state legislature.

The county also faces a multibillion-dollar debt crisis and has been fighting since February 2008 to stave off what would be the largest municipal bankruptcy in U.S. history.

Regions Bank confirmed the negotiations but gave no details of the size or terms of the proposed loan to the county.

"Regions Bank is currently discussing the terms of a bridge loan with Jefferson County that the county hopes will allow employees to return to work and reestablish vital services throughout the county," the bank said in a statement.

"We are working toward a solution that, if attainable, meets the needs of both the county and the bank," it said.

The staff cuts have exacerbated the county's financial problems by reducing its ability to collect revenue.

If the loan is approved, Collins said it would help the county to revive service in key areas.

"Our goal is to reopen a couple of satellite court houses, and our priority is to bring back revenue collection personnel and security personnel," Collins said.

Jefferson County's debt stems from interest and bond swaps it took out earlier this decade in a bid to upgrade its sewer system. (Writing by Matthew Bigg, editing by Jim Loney and Leslie Adler)