US-UBS deal forged in sweat-drenched talks-source

* Talks went down to the wire in steamy Washington office

* Negotiators were sweating, source close to talks says

* Agreement initialed morning of talks, at Mint Annex

By Tom Brown

MIAMI, Aug 13 (Reuters) - U.S. and Swiss negotiators were drenched in sweat when they finally settled their dispute over access to the names of American clients of UBS AG (UBSN.VX) (UBS.N) suspected of tax evasion, a source close to the talks said on Thursday.

The agreement, which could undermine Switzerland's cherished reputation for strict bank secrecy, was hammered out just hours before it was announced during a conference call with U.S. District Court Judge Alan Gold in Miami at 9 a.m. EDT (1300 GMT) on Wednesday.

It was initialed in a steamy Washington office at 2:45 a.m. (0645 GMT) the same day, capping the latest in a series of long-running and often bitter negotiations between Swiss and U.S. government officials.

"They were over at the Mint Annex, which is kind of a satellite building for certain IRS people," said the source, who asked not to be identified because he had not been authorized to disclose details of the negotiations.

"They turned the air conditioning off at 10 o'clock at night," he said, referring to the building in downtown Washington, which is known for its hot and humid summers.

"They were all sweating pretty good," the source added.

He did not elaborate on the final round of negotiations involving officials from the U.S. Justice Department and Internal Revenue Service (IRS) but said the Swiss side in the talks had included many "heavy hitters" from Berne, including the deputy head of the Swiss federal office of justice.

Washington's case against UBS, the world's second-largest wealth manager, had strained relations between the United States and Switzerland because it challenged the latter's coveted bank secrecy laws and could lead to a breakdown in its tradition of bank confidentiality.

CASE TO BE DISMISSED

The head of the Swiss diplomatic service also played a role in the talks, but the source said the U.S. State Department was not directly involved.

Details of the agreement were not disclosed on Wednesday.

But a U.S. government source said on Thursday that Washington's case against UBS would only be dismissed once the final agreements were signed.