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MIAMI (Reuters) - The United States said on Wednesday no deal had been reached so far in talks to settle a tax evasion dispute with UBS AG and it expected a trial against the Swiss bank to go ahead as scheduled on Monday.
The case marks the biggest challenge yet by a foreign government to Switzerland's long and jealously guarded tradition of bank secrecy.
U.S. authorities are expected to use the trial to demand enforcement of a summons ordering UBS to turn over the details of accounts suspected of being used by thousands of wealthy Americans to evade U.S. income taxes.
The case is expected to figure prominently in talks between U.S. Secretary of State Hillary Clinton and Swiss Foreign Minister Micheline Calmy-Rey at a meeting scheduled for Friday.
"The parties, and that is primarily the Swiss government and the United States government, have been discussing settlement but no agreement has been reached," said Stuart Gibson, an attorney for the U.S. Justice Department's tax division.
"The government plans to continue talking but the United States' position is that the court should proceed to hold the hearing next week," he said on a status conference call with the Florida federal court judge presiding over the case.
Judge Alan Gold agreed to hold another status conference on Friday, to allow the parties to see whether a deal could be reached or an additional delay was necessary.
But he said he was otherwise prepared to proceed with the trial on Monday and issued an order saying that "absent a signed settlement agreement" no requests for a delay would be considered after Friday's conference at 8:45 a.m. EDT (1245 GMT).
The trial against UBS was originally set to begin in Miami on July 13, but Gold agreed to delay it until August 3 to allow time for a settlement.
In his comments on the conference call, Gibson took issue with a claim by Eugene Stearns, an attorney for UBS, who said he saw no point in proceeding to trial if the litigants were "just literally minutes away from achieving an agreement."
"I would be derelict if I agreed with Mr. Stearns' characterization ... I don't think that that's the case," Gibson said, after saying the U.S. government was uncertain about the possibility of reaching any out-of-court settlement.
He offered no details on the obstacles to an agreement, but UBS itself later issued a statement saying "productive discussions" so far had failed to produce an accord.
"UBS continues to believe that this is a matter best resolved in direct discussions between the respective governments and is committed to supporting the process," the statement said.
In the run-up to Wednesday's status conference, an American client of UBS AG pleaded guilty on Tuesday to using Swiss bank accounts to hide more than $8 million from U.S. tax authorities and said a Swiss government official received $45,000 to help cover up the fraud.
Swiss prosecutors said they were investigating the bribery allegation and Swiss Finance Minister Hans-Rudolf Merz, who also holds the country's rotating presidency, said the probe should help clarify whether it was based on "rumor or reality."
"We don't believe that this has happened, but the testimony is so serious that we immediately got the law involved and we will let this be cleared up by the judiciary," Merz said.
U.S. authorities are trying to force UBS to disclose the identity of as many as 52,000 U.S. holders of secret Swiss accounts suspected of dodging taxes.
In February, UBS agreed to pay $780 million to settle criminal charges it was facing under a separate, but related tax dispute. It agreed to hand over data related to around 250 U.S. clients who had secret Swiss accounts and promised to exit its offshore business to U.S. clients.
Berne stretched bank laws to the limit to pass on the data without a formal violation of Swiss law, but tax lawyers said the case was a serious hit to traditional Swiss bank secrecy.
Additional reporting by Oliver Hirt in Zurich; editing by Maureen Bavdek and Andre Grenon