The US is to be allowed to inspect its spy plane, which was forced to make an emergency landing on Hainan Island on April 1st following a collision with a Chinese fighter jet.
The official Chinese news agency, Xinhua, yesterday said the inspection could go ahead as China had completed its investigation and collection of evidence into the incident.
The two countries are still in dispute over the cause of the accident in which a Chinese pilot died. China insists its fighter jet was rammed by the US EP-3 surveillance aircraft. But the US claims that the Chinese aircraft veered towards its plane.
According to yesterday's Xinhua report, the US agreed during talks in Beijing on the spy plane incident earlier this month to consider making a payment to China.
"The two sides will conduct another round of negotiations on the specific amount of the US payment and the items to be covered," Xinhua said.
It claimed that US and Chinese negotiators also agreed to discuss ways to avoid similar incidents "through enhanced consultation mechanism on military maritime safety".
On Thursday, the Pentagon said some US secrets were lost from the spy plane, but the extent of the breach was still being assessed.
The US crew destroyed some of the plane's secrets in the few minutes between the collision and landing on Hainan, where People's Liberation Army soldiers immediately boarded the aircraft.
The US initially warned China to keep away from the plane, saying it was US sovereign territory. But China ignored the warnings and Chinese technicians quickly swarmed the $80 million aircraft crammed with sophisticated surveillance equipment.
The decision to give US officials access to the plane was a sign of progress in the dispute over the collision and was all the more significant considering China's anger at the US over its decision to go ahead with the sale of a significant arms package to Taiwan.
The US Vice-President, Mr Richard Cheney, yesterday said in Washington it was "an encouraging sign" the Chinese were willing to grant access to the spy plane stranded on Hainan Island but he denied the US had agreed to pay anything other than recovery costs.